Industrywide Issues

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    Eureka Hunter Gets New $117M Line of Credit, Expansion Continues

    Eureka Hunter Pipeline, a subsidiary of Magnum Hunter, is a small but growing midstream company with most of its operations in West Virginia (see these MDN articles about Eureka Hunter and their recent expansion). Apparently they plan to keep on growing. Today Eureka Hunter announced they’ve got a new line of credit at the bank–for a cool $117 million. Their line of credit can grow to $150 million under the right conditions.

    Magnum Hunter CEO Gary Evans says the new credit line means MH itself won’t have to float cash to the midstream subsidiary like it does now–meaning more flexibility and Eureka Hunter can expand faster. And that’s a good thing! Here’s the Eureka Hunter announcement posted today:
    Read More “Eureka Hunter Gets New $117M Line of Credit, Expansion Continues”

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    Rural PA County Hopes NatGas Electric Plant Attracts Businesses

    Here’s a new twist: Economic development leaders in Bradford County, PA are hoping a local natural gas-fired electrical generating plant now being built will be a magnet that attracts petrochemical businesses to the area. We’ve known for some time (since last year) that Moxie Liberty, which later sold the rights to Panda Liberty, would build a new electrical generating plant near Wyalusing (Bradford County), PA (see Moxie Liberty Sells PA Electric Plant Project to Panda Power). The Panda Liberty plant is now under construction with large cranes and more than 100 workers in and around the site.

    Local economic development leaders are hoping the Panda Liberty plant, which will use locally mined Marcellus gas, will catch the attention of petrochemical manufacturers of waxes, lubricants and other products that use natural gas as an ingredient. Already inquiries from such “downstream” businesses have been coming in–a very good sign indeed…
    Read More “Rural PA County Hopes NatGas Electric Plant Attracts Businesses”

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    CNG Truck Fleets Now Mainstream? NY Company Buys 15 CNG Trucks

    Is this a sign of things to come? The “received wisdom” has been that compressed natural gas (CNG) used to power cars and trucks is more hope and wishful thinking than it is reality. But maybe, just maybe, the tide as now turned and CNG is more reality than it is hope. Case in point: Trillium CNG, a subsidiary of Integrys Energy Group Inc., announced last September that it will build a new CNG fueling station next door to Willow Run Foods in Kirkwood, NY. Yes, Kirkwood, NY is in MDN’s own backyard! Willow Run Foods is a large packaged foods company that delivers food to fast food restaurants in 14 East Coast-area states.

    With trucks running to 14 different states, some of which run on CNG, you have to ask–how will they get home? They’ll have to fill up somewhere. Which means there are enough CNG fueling depots scattered around, at least for some of their regular runs, that CNG will work. Oh, and diesel fuel right now (in the Binghamton area) is $4.37 per gallon. The equivalent CNG is $2.60–so you can see why Willow Run has invested in 15 CNG rigs.
    Read More “CNG Truck Fleets Now Mainstream? NY Company Buys 15 CNG Trucks”

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    How Thick is the Marcellus? USGS Report Sheds (a Little) Light

    Normally the U.S. Geological Service (USGS) will push out a press release when they release a new study. However, for a recently published report titled “Characterization of the Marcellus Shale based on computer-assisted correlation of wireline logs in Virginia and West Virginia” (full copy embedded below) there was no such press announcement. We noticed the report when it popped up in one of our news gather filters. As you might expect, this new report is heaving on wonky science. It’s weakness (depending on your viewpoint) is that the data they’ve analyzed comes from just 9 wells in Virginia and West Virginia. The purpose of the report is to test some theories on why the Marcellus is thicker in some places than in others.

    This report will be of interest to geologists and E&P companies. For the average person? Probably not so much. However, there is a map on page 8 we like and think you will too. That map shows the Marcellus region with the authors’ best guess as to the thickness of the Marcellus layer in various areas throughout the northeast. Remember, usually the thicker the better (the more natgas there is likely to be locked away in the shale)…
    Read More “How Thick is the Marcellus? USGS Report Sheds (a Little) Light”

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    Obama Floats Plan to Save the Planet from Methane (Yawn)

    The U.S. is on a mission to control methane because it’s a contributor to the mythical problem that the earth is warming too much–from man. Methane contributes to the so-called global warming problem, so the theory goes. And if we could just control it (i.e. use the heavy hand of government with it’s gun to your head), why, we’d stave off ecological Armageddon! At least until the next generation of deadbeats comes along. One problem–most methane released into the atmosphere comes from termites and cows–but The Great and Powerful Obama(oz) has a solution even for persnickety pests and bovines. We’ll just tax ’em.

    Last week the “brain trust” at The White House released it’s government-has-all-the-answers-and-kiss-more-of-your-freedoms-goodbye solution for tackling methane emanations (see a copy of the new White House report on methane emissions embedded below). As you might guess, part of the “solution” is to have the EPA continue its rogue, out-of-control attempts at more regulation of the oil and gas industry–the very industry that is set up to capture as much methane as it can!…
    Read More “Obama Floats Plan to Save the Planet from Methane (Yawn)”

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    Kirkwood NY Landowner Group Actively Negotiating Lease Deal (!)

    too much hope is dangerousWhat’s this? Signs of life in moribund New York on the gas leasing front?? Indeed it’s true. MDN was tipped on two bits of news that will be encouraging for some New York landowners. One bit of news is that the Kirkwood, NY Gas Coalition (outskirts of Binghamton, NY, in Broome County) may soon call for a meeting of coalition members. It seems behind the scenes the coalition steering committee has been negotiating a gas lease for members.

    The second bit of news is that some NY landowners who live close the border with PA (in the Kirkwood and Windsor areas) have been contacted and asked to sign an agreement to allow seismic testing on their land. We have a copy of a generic contract proposed by the Kirkwood Coalition attorney (embedded below) which he says strikes a better balance for landowners who want to sign such an agreement. Both pieces of news together give a spark of hope for NY landowners. But let’s not go overboard. As Donald Sutherland’s character says in the Hunger Games, a little hope is a good thing, a lot of hope is dangerous…
    Read More “Kirkwood NY Landowner Group Actively Negotiating Lease Deal (!)”

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    ULS Says PVR Marcellus Bankrupted Their Company by Not Paying

    Utility Line Services Inc. (ULS), a company that does construction work for utility companies–like digging trenches and laying pipeline–is suing PVR Marcellus Gas Gathering in a Delaware County, PA court. ULS says PVR owes them more than $17.7 million in unpaid invoices and another $7.8 million in lost profits. The lawsuit stems from work done by ULS for PVR in laying 17 miles of pipeline in Lycoming County. Like all lawsuits, this one is a bit complicated, but essentially ULS says PVR slowed and then stopped payments, even though the pipeline was completed and gas now flows through it.

    Both companies are pointing the finger at the other saying the other company was responsible for obtaining certain permits, and lack of those permits caused delays and increased costs in overtime and project overruns. Unfortunately PVR’s lack of payments to ULS has bankrupted ULS. They’ve closed their doors, laid off 600 workers and sold their equipment at auction. Not a happy ending. Here’s the story behind the lawsuit just getting under way and expected to run for at least three weeks in Delaware County Common Pleas Court…
    Read More “ULS Says PVR Marcellus Bankrupted Their Company by Not Paying”

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    Study Says Each PA Well Creates $5-$10K+ in Road Damages

    A new study recently published in the peer reviewed Journal of Infrastructure Systems from a half dozen students and professors, some of them working for RAND Corporation, attempts to answer the question, How much road damage due to truck traffic happens in Pennsylvania–and how much does it cost? The study, titled “Estimating The Consumptive Use Costs of Shale Natural Gas Extraction on Pennsylvania Roadways” (full copy embedded below), was submitted for consideration a year ago–in March 2013. It was accepted by the Journal in November and finally published in their February 2014 issue.

    The folks doing the research are smart–members of the American Society of Civil Engineers–we don’t dispute their credentials. What did they find? Using estimates of how many truck trips it takes to drill a well from data collected by the New York Dept. of Environmental Conservation (yes, NY data where there is no shale drilling), the authors estimate that for more frequently traveled state and local roads in PA the damage amounts to an average of $5,000 to $10,000 per well drilled. If you include less-traveled rural roads, that number jumps to $13,000 to $23,000 per well average…
    Read More “Study Says Each PA Well Creates $5-$10K+ in Road Damages”

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    WV Commerce Sec Burdette Praises Odebrecht/Antero, Warns Drillers

    Aside from WV Gov. Earl Ray Tomblin, no one in West Virginia has been more dedicated, more focused and more committed to finding an ethane cracker plant for the state than WV Commerce Secretary Keith Burdette. MDN has stories going back years that mention Burdette and his quest for a cracker (just one example: WV’s Burdette Still in Hunt for Ethane Cracker Plant). We think it’s a fair statement to say without Burdette, the Odebrecht cracker plant project would not have happened. Our hat is off to Keith and the marvelous work he’s done for the state.

    Yesterday Keith delivered a rousing speech at the Marcellus to Manufacturing Ethane Development Conference at the Charleston Civic Center. We have a transcript of his speech below. In it, Keith acknowledges the contributions of Odebrecht’s David Peebles in making this project happen. He also praises Antero Resources for their bold and brave commitment to providing half of the ethane for the new cracker plant. Finally, Keith sounds a word of warning to other drillers that are signing agreements to ship ethane out of the northeast region. He believes they may want to reconsider. The northeast has enough ethane for “a dozen crackers” if so much of it wasn’t heading to the Gulf Coast or Canada via pipeline…
    Read More “WV Commerce Sec Burdette Praises Odebrecht/Antero, Warns Drillers”

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    Man Camps Spring Up in Marshall County, WV Near Drill Sites

    Housing for workers is always an issue when a lot of drilling comes to town. Even if rig workers are not from out of state, more times than not, they are from another area in the state being drilled. That is, they’re still “out of towners” and they need a place to stay. Sometimes drillers will rent hotel rooms for workers. Sometimes RV parks fill up. And sometimes local apartment rentals go through the roof, creating a “crisis” for welfare slugs who need to rent a decent place to live while they don’t work (see New Study Claims Housing Crisis in NE PA from Gas Drilling).

    Enter the man camp. Or as it’s called in Marshall County, WV, the “labor camp.” Labor camp sounds like something from North Korea or the old Putin-style Soviet Union. At any rate, labor camps are springing up in Marshall County, WV to handle some of the need for workers to have a place to stay while working on rigs that move from place to place…
    Read More “Man Camps Spring Up in Marshall County, WV Near Drill Sites”

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    17-Mile Gas Pipeline in Steuben County, NY Makes Progress

    Empire Pipeline, a subsidiary of National Fuel Gas Company (which also owns driller Seneca Resources) is asking the Federal Energy Regulatory Commission (FERC) for approval on a new 17-mile pipeline in Steuben County, NY. The project is called the Tuscorara Lateral Project and will cost a projected $43 million. The pipeline will connect a gas storage field and compressor station in Tuscarora, NY (also owned by National Fuel Gas) with the existing Empire Pipeline network–a network that stretches from Buffalo to Syracuse and down to Corning. This “little” piece of pipeline will open up much needed extra volumes of natural gas for Upstate New Yorkers.

    Empire/National Fuel is now negotiating with landowners to run the pipe under their property. They hope to begin building later this year and have the pipeline in service in November 2015. Below is a story about the project, the reason for it, the jobs it will create, and finally a copy of a presentation given last year at a special open house with full details…
    Read More “17-Mile Gas Pipeline in Steuben County, NY Makes Progress”

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    Noble Energy Donates $250K to WV Community College Program

    Noble Energy certainly live up to it’s name of “noble.” Earlier this week Noble announced a $250,000 one-time gift to the West Virginia Community College’s new Appalachian Petroleum Technology Training Center. The Center offers one-year certifications and two-year degrees in petroleum technology–just one of 14 programs in the country like it. MDN previously wrote about the new program in May 2013 (see New Appalachian Petroleum Technology Training Center in WV). Graduates coming from the program have the ability to earn between $60,000-$100,000 per year–starting! It’s a fabulous program and Noble has really stepped up to the plate to ensure the program not only survives, but thrives–so kudos to Noble.

    Here’s the announcement from the Community and Technical College System of West Virginia (WVCTCS):
    Read More “Noble Energy Donates $250K to WV Community College Program”

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    Antero to Provide 50% Ethane Needed at Parkersburg Cracker Plant

    halfway thereThe ethane cracker plant planned for Parkersburg (Wood County), WV, to be built by Odebrecht and operated by Odebrecht subsidiary Braskem America, took another giant step closer to reality yesterday. Powerhouse Marcellus/Utica driller Antero Resources announced they will provide 30,000 barrels per day of ethane for the proposed new plant when/if it gets built. That’s half of what the plant needs to operate. Antero Resources CEO Paul Rady was joined by Odebrecht VP of business development David Peebles on stage at the Marcellus to Manufacturing Ethane Development Conference at the Charleston Civic Center for the big announcement yesterday. WV Gov. Earl Ray Tomblin took to the stage to crow about the deal too (he’s earned the right).

    It was just Monday of last week that MDN observed that the Odebrect cracker plant just “feels” like it’s going to happen (see Odebrecht’s WV Ethane Cracker has The Big Mo–Momentum). Yesterday’s Antero announcement is more evidence of that. Below is the official Antero announcement about their ethane contribution to the proposed new cracker, along with a report of who said what about the deal at yesterday’s Charleston conference…
    Read More “Antero to Provide 50% Ethane Needed at Parkersburg Cracker Plant”

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    County Officials Meet with Shell on PA Cracker, Come Away Hopeful

    Seems like it’s “cracker day” at MDN. Long before Odebrecht announced their potential ethane cracker plant for Parkersburg, WV, Shell announced plans to build a cracker in Pennsylvania. In fact it was exactly two years ago this month that Shell announced the location would be Monaca (Beaver County), PA (see Shell Announces Location of Ethane Cracker Plant). PA state legislators eventually voted on a package of significant tax breaks for the proposed new plant (see PA Legislature Reaches Deal on Tax Credit for Cracker Plant). However, since that time, it seems like the PA cracker deal has cycled through highs and lows as to whether it would actually get built (see PA Ethane Cracker – On Again, Off Again…Now On Again?).

    More recently MDN told you the pendulum had swung back to the pessimistic side (see Shell’s Shale Pessimism Signals Worry for Some re PA Cracker). But what’s this? Last week some 30 Beaver County officials met with Shell about the proposed ethane cracker plant and left that meeting feeling “hopeful”–which is a good sign. Shell told the officials about moving forward with plans to move a portion of a local roadway, relocate power lines and other big-ticket projects that Shell would not be spending money on unless there is serious interest in moving forward. Here’s more from last week’s hopeful meeting between Shell and Beaver County officials…
    Read More “County Officials Meet with Shell on PA Cracker, Come Away Hopeful”

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    PA Dem Floats 5% Marcellus Severance Tax “For the Children”

    Pennsylvania Democrats continue their push for economic suicide. Borrowing from their 50 year-old playbook, the latest push is to impose a 5% severance tax on Marcellus Shale drilling in the state–which would effectively kill all drilling–and use the money (please don’t laugh)…”for the children.” Yes folks, PA’s schools suck big-time, and the only thing that can save them now is to extract some money out of the pockets of those nasty, filthy (and rich) drillers so teachers can educate young crumb crunchers to the superiority of socialism and taking money from one group (those who work) to redistribute to another (those who don’t work). What better way than to sink a pipeline right into the piles of money that come from drilling? What dunces.

    State Sen. Vincent Hughes, dunderhead Democrat from the Philadelphia area, said he will introduce legislation to impose a 5% Marcellus Shale severance tax that will be DOA, so he and other Dems can use it as a politically divisive campaign issue come November. Such caring (and intelligent) folks those PA Democrats. Just a teeny, tiny problem Vinny–your party has voted to stop all Marcellus drilling (see PA Democrat Party Votes to End Marcellus Shale Drilling Statewide). How will you tax something that doesn’t happen anymore? Oops…
    Read More “PA Dem Floats 5% Marcellus Severance Tax “For the Children””

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    EPA/DOI Ask for More Time to Review PA-NY Constitution Pipeline

    NGI’s Shale Daily is reporting both the federal Environmental Protection Agency (EPA) and the Dept. of Interior (DOI) have filed requests with the Federal Energy Regulatory Commission (FERC) to extend the comment period on the proposed 124-mile Constitution Pipeline. The Constitution will run from the prolific gas fields of Susquehanna County, PA across the border and up into Schoharie County, NY where it will interconnect with two major interstate pipelines–carrying Marcellus Shale natural gas produced by Cabot Oil & Gas and other drillers (see New Marcellus Constitution Pipeline Announces “Final” Route). Along the way a local utility company will tap into the Constitution to deliver natural gas to rural locations (see Leatherstocking to Tap Constitution Pipeline for Local Deliveries).

    However, the Constitution will need to make a few changes, according to FERC (see FERC: Constitution Pipeline Should Make Changes to Lessen Impacts). But nothing too major. That is, unless the EPA and DOI jump in with new demands. Their delay is unwelcome and potentially troubling–although we’re not ready to hit the panic button just yet. Here’s what Shale Daily says about the request from EPA & DOI:
    Read More “EPA/DOI Ask for More Time to Review PA-NY Constitution Pipeline”