Industrywide Issues

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    Which Way Do You Flow? The Price of Gas, the Marcellus & Canada

    What’s the long-term prognosis for the commodity price of natural gas? Depends on who you ask–but overall, “the market” seems to be saying even amidst one of the coldest winters on record in decades, the longer term trend will be low to moderate prices for methane/natural gas. Industry publication Oil and Gas Investments Bulletin issued one of their analysis stories on the press release wire (a clever marketing move that we appreciate). The story delves into the issue of gas prices and its relationship to Canadian exports/imports. One of the major components of the story (full copy below) is an analysis by investment firm Raymond James.

    Guess which shale play Raymond James spends a good deal of time examining? The Marcellus, of course–which is why we found this particular story about gas prices intriguing. Another reason the story is intriguing is because it reveals that Canada, which has long been the #1 source of natural gas imported into the U.S., has seen their gas flows into the U.S. drop by 50% in the past six years. And now, Marcellus gas is starting to flow the direction, into Canada…
    Read More “Which Way Do You Flow? The Price of Gas, the Marcellus & Canada”

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    FERC Invokes Emergency Power to Force Propane Shipments on TEPPCO

    first time everLast Friday, for the first time ever, the Federal Energy Regulatory Commission (FERC), the agency charged with approving transmission pipelines for oil and gas across the country, invoked its its emergency authority under the Interstate Commerce Act and directed Enterprise Products Partners to prioritize propane shipments on one of its pipelines that runs from the Gulf Coast to the northeast and Midwest (see map below). The Enterprise TEPPCO (TE Products Pipelines Company) pipeline handles various refined products, including gasoline and natural gas liquids like propane. The order directs Enterprise to prioritize propane shipments beginning yesterday or today and continuing for a week. Last Friday Enterprise told shippers it would inject 150,000 barrels of propane into its pipeline on yesterday (Monday) and 350,000 barrels on Thursday. Enterprise later said they are willing to continue prioritized propane shipments until Feb. 21.

    All of this is in response to a developing crisis. More than 20 states have declared a state of emergency due to propane shortages. In some Midwestern states, residents and farms are in danger of running out of propane. Does that justify the federal government stepping in? Did FERC also direct Enterprise to reverse the flow of the newly minted ATEX ethane pipeline that runs from the northeast to the Gulf Coast so it too can carry propane?…
    Read More “FERC Invokes Emergency Power to Force Propane Shipments on TEPPCO”

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    New SRBC Research Finds Marcellus Drilling Safe for Water

    This is fascinating–at least for those of us with an interest in the Marcellus and Utica Shale. The Susquehanna River Basin Commission (SRBC) which monitors and controls water withdrawals from creeks and rivers that empty into the mighty Susquehanna River (which eventually empties into the Chesapeake Bay), has long been a model of how to properly manage the areas under their control when it comes to shale drilling. The SRBC stands in stark contrast to the dysfunctional Delaware River Basin Commission (DRBC) which is hamstrung by New York City influence–apparently beholden to self righteous and self important liberal fat cats like Gov. Can’t-Make-a-Decision Cuomo and Mayor Ban-All-Fracking Bill de Blasio.

    While the DRBC dithers, along with Cuomo, on whether or not to allow drilling, the SRBC forges ahead and does real science–out in the field–to ensure the water resources under their management are not being adversely impacted by Marcellus drilling. The SRBC launched a state-of-the-art Remote Water Quality Monitoring Network in 2010 to track water quality throughout the SRBC region. They’ve just issued a second, comprehensive report on their findings thus far (embedded below). And what are those findings? Marcellus Shale drilling is not/has not adversely affected water quality anywhere in the SRBC region. Huh. Who would of imagined that? Science yet again proves that shale drilling is safe for water supplies…
    Read More “New SRBC Research Finds Marcellus Drilling Safe for Water”

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    Loyalsock Drilling Gets an Anti-Drilling Spin Job by PennFuture

    spinWe normally skip pronouncements from extremist anti-drilling groups like PennFuture. They, along with other PA groups like PennEnvironment, the League of [Liberal Democrat] Women Voters, Sierra Club, Shale Justice…you get the idea–hold unreasonable views on shale drilling and development. They simply want it all stopped–which ain’t gonna happen. There is no reasoning with them–no middle ground or acceptable way to drill for shale for such groups. So they become ever-more shrill in their false accusations and allegations about what may/maybe/might/could/possibly/theoretically happen if a particular area were to see shale drilling. Say, oh, like the Loyalsock State Forest in PA.

    We include a press release by PennFuture below, spinkled with lots of unspoiled this’ and pristine thats, pushing the panic button that (gasp) Anadarko Petroleum might actually be allowed to drill on land they legally hold the rights to drill on (see Manufactured Controversy over Drilling in Loyalsock State Forest). Why, that forest actually contains a “critical bird nursery”–can you imagine the malevolent intent of disturbing little birdies? What a wicked company Anadarko must be. Below is the PennFuture press release that we think has more to do with fundraising than any real or imagined harm that may come to Loyalsock. We bring it to you as an example of a masterful spin job…
    Read More “Loyalsock Drilling Gets an Anti-Drilling Spin Job by PennFuture”

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    RUMA – Columbiana County, OH Enjoys Improved Roadways

    Let’s RUMA! No, it’s not the latest dance craze. RUMA stands for Road-Use Maintenance Agreement which are contracts used by counties in Ohio to ensure roads damaged or potentially damaged by heavy equipment being moved for shale drilling and pipeline work is either prevented or repaired.

    Thanks to 84 different RUMAs in Columbiana County, OH put in place since 2011, county residents are enjoying miles and miles of revamped roads–all paid for by the drilling industry and not taxpayers. Thank you Utica Shale!…
    Read More “RUMA – Columbiana County, OH Enjoys Improved Roadways”

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    PA Rural Residents Burn Marcellus Gas, Save Big Bucks on Heating

    One of the conundrums of shale gas drilling in the Marcellus and Utica Shale is that the places where the gas is drilled and extracted are largely rural–places like Susquehanna County, PA, in the northeastern part of the state. The entire county has 43,000 residents (11,700 families). The largest “city” in Susquehanna County is the county seat of Montrose, population 1,600 (750 households). It’s just not all that economical to run natural gas pipelines to homes around the county–even though residents live atop an embarrassing riches of natural gas. One company, Leatherstocking Natural Gas, changed all that last year when they started to run pipelines to residences and businesses around Montrose.

    This winter, one local business owner (an auto mechanic’s shop) now heating with natural gas, responded to his new fuel source this way: “Before when you were here, you asked if I was going to save money [by heating with natural gas]. I said ‘I sure as hell hope so.’ Well, I sure as hell am, let me tell you.” That about sums up the change from heating with oil to heating with home-grown, cheap and abundant Marcellus shale gas…
    Read More “PA Rural Residents Burn Marcellus Gas, Save Big Bucks on Heating”

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    Important Conference on Clean Fracking…in Houston

    MDN does not usually promote events outside of the northeast because our focus is on the Marcellus and Utica Shale. But sometimes an event comes along outside of the Marcellus/Utica orbit that’s worth promoting and calling attention to. The Clean Frac’ing Conference 2 being held in Houston, TX next week (Feb. 17-18) is one of those events. MDN is happy to partner with the organizers of Clean Frac’ing 2 to put the word out. We have many faithful readers in the Houston area–so we want to make them aware of this top notch event which addresses the timely topic of making fracking cleaner and greener. Yes, there is room for improvement with fracking technology, and yes, it’s rapidly becoming even better than it was yesteryear. We applaud conferences like this one for tackling a tough issue head-on.

    Incidentally, one of MDN’s favorite industry friends–George Stark from Cabot Oil & Gas (a big Marcellus driller in northeast PA)–will be presenting at Clean Frac’ing 2. Tell George MDN says hello if you spot him. Below is a press release from the conference organizer which gives you a good overview of the event…
    Read More “Important Conference on Clean Fracking…in Houston”

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    Are Exports to Blame for High Propane Prices?

    what's the dealWhat’s the deal with propane prices? MDN previously pointed out lack of storage in the northeast because of NY Gov. Andrew Cuomo’s dallying on a decision to allow a new storage facility near Seneca Lake has contributed to rising propane prices (see Northeast Propane Shortage – Andrew Cuomo Partially to Blame). Although Gov. Can’t-Make-a-Decision is partially to blame, so too is the brutally cold (and long) winter we’re experiencing–a winter that casts serious doubt on the notion of man-made global warming.

    But there is a possible third reason why propane prices have gone up: exports. U.S. Energy Information Administration (EIA) data shows both a record volume of propane being produced, and a record volume being exported out of the country…
    Read More “Are Exports to Blame for High Propane Prices?”

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    CSSD’s Andrew Place Talks About 3-Leg Approaches & Firehoses

    Eckert Seamans, the Pittsburgh, PA energy law firm that employs the former PA Sec. of Environmental Protection (and pot smoking proponent running for governor) John Hanger, hosted a morning breakfast meeting last Friday in Southpointe to discuss “responsible shale development.” Er, has it been *irresponsible* thus far? At any rate, three speakers were on the agenda for the breakfast conclave, one of whom was EQT’s Andrew Place–the interim and outgoing director of the Center for Sustainable Shale Development, or CSSD (see Center for Sustainable Shale Comes Roaring Back (to Life)).

    According to Place, the CSSD takes a “three-leg approach” to the shale drilling issue. And although the public has heard virtually nothing from the CSSD since it’s founding until a few weeks ago when it came roaring back, Place said it’s been a nonstop “firehose” of activity over at CSSD HQ. From the breakfast meeting (that curiously didn’t include Hanger on the speaker’s dias), here’s more on Andrew Place’s comments:
    Read More “CSSD’s Andrew Place Talks About 3-Leg Approaches & Firehoses”

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    ‘Noise Solutions’ for Drilling/Compressor Plants Locates in NWPA

    Here’s a feel good supply chain story. A privately held Canadian company that in 1997 innovated a way to make industrial operations–like noisy compressor plants–quieter, wanted to build a manufacturing plant here in the U.S.–near the oil and gas industry that will use their innovative products. So where did Scott MacDonald, president and CEO of Noise Solutions, look? The northeast of course–Marcellus and Utica territory. He considered New York, but the taxes are way too high and the shale drilling non-existent. He also considered West Virginia and Ohio, which were good choices. But MacDonald settled on Sharon (Mercer County), PA as the new home for a plant that already employs 35 people and is on it’s way to employing 125 or more.

    MacDonald and Noise Solutions will spend $5 million to renovate the former Winner International warehouse where the company chose to set up shop. That investment along with the ripple effect of full-time employees paying local and state taxes (and spending much of their paychecks in the local community) gives Sharon a big “economic stimulus” courtesy of this Canadian company. Here’s more about Noise Solutions and their new operation in Sharon, PA…
    Read More “‘Noise Solutions’ for Drilling/Compressor Plants Locates in NWPA”

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    PA’s Long-Lived Marcellus Renaissance Can’t be Denied, Even by NY

    Judging by the stories we’re now seeing, must be Gov. Cuomo’s internal poll numbers are a lot worse than we thought. So bad that his buddies at Gannett need to try and prop him up by rewriting current history. Get this, the headline for a story in the Binghamton Press & Sun-Bulletin actually attempts to make the claim that the economic miracle happening right across our border in PA…isn’t actually happening! Talk about chutzpah. “Pay no attention to all of those jobs–all of that money–all of the new tax revenue. None of it’s real. It’s all a flash in the pan. Here today, gone tomorrow.”

    Wow. We guess you can fool some of the people all of the time, going by the PSB’s propaganda…
    Read More “PA’s Long-Lived Marcellus Renaissance Can’t be Denied, Even by NY”

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    Utica Shale Bails Monroe County out of Potential Hole

    Ormet, an aluminum plant in Hannibal (Monroe County), OH is the county’s largest employer with 700 people working at the plant. Ormet officials shut the plant down last October claiming they couldn’t get a reasonable agreement on reducing high electric rates for the plant. That’s 700 people out on the street, looking for jobs (see Ormet Workers Rally At AEP). But what’s this? Monroe County Auditor Pandora Neuhart and County Treasurer Judy Gramlich are not worried about sales tax revenues in the county taking a hit from all of those unemployed workers. Why? Because Utica Shale drilling has taken off in the county and tax revenues from drilling are starting to flow in.

    New Utica drilling revenue is not jump-up-and-down good news for the displaced Ormet workers (that situation needs urgent attention by Gov. Kasich), but the new Utica revenue is a good sign that regular county operations will not be adversely affected by the Ormet layoffs. Thank you Utica Shale! An update on Utica drilling in Monroe County, and how the now bankrupt Ormet is profiting from it (with wells on their property)…
    Read More “Utica Shale Bails Monroe County out of Potential Hole”

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    NPGA Asks FERC to Reverse Flow of ATEX Pipeline & Pump Propane

    There is a serious, some would say “dangerous” shortage of propane in the northeast, for a number of reasons. The ongoing, brutally cold winter is partially to blame (oh global warming, where are thou? we need thee now!). In what appears to MDN to be a case of sour grapes, the National Propane Gas Association (NPGA), representing some 3,200 propane companies, has asked the Federal Energy Regulatory Commission (FERC) to force the brand new Appalachia to Texas (ATEX) pipeline to quite pumping ethane from the Utica/Marcellus to Gulf Coast and instead reverse the flow and pump propane from the Gulf to the northeast citing the propane shortage as the reason.

    Well, it is an emergency, right? Why do we say sour grapes? Because part of the newly online ATEX was an existing pipeline that used to flow south to north and carry (you guessed it)–propane. The NPGA and its members opposed losing that capacity and challenged Enterprise Product Partners, the builder of the ATEX, in court. They lost. So it appears they’re using the current “crisis,” which is partially brought on by high demand from the cold and partially lack of storage capacity, which is the fault of NY Gov. Andrew Cuomo, as an excuse to get the pipeline turned around, at least for a period of time…
    Read More “NPGA Asks FERC to Reverse Flow of ATEX Pipeline & Pump Propane”

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    PA Dems, DRBC Squeal over Proposed Cut to DRBC Budget

    The Delaware River Basin Commission suckling pig is about to have less slop in the trough to gorge itself on, thanks to wise oversight by PA Gov. Tom Corbett. The DRBC, for those who don’t know, is an interstate quasi-governmental agency made up of the states that are in the Delaware River Basin, including Pennsylvania, New York, New Jersey (where HQ for the DRBC is located) and Delaware. The governors for each of those states plus a representative from the U.S. Army Corps of Engineers make up the voting board of the DRBC.

    For years PA has borne the brunt of the funding for the DRBC–disproportionately–lavishing the DRBC staff with buckets of cash with which they supposedly do their jobs. PA has had enough. Time for the other states that profess to love the DRBC so much to pull their own weight, so Corbett has decreased the amount of money PA will contribute to the trough. And that has the pigs squealing, including Corbetts potential Democrat opponents for the governor’s chair and (not surprisingly) DRBC staffers who have gone apoplectic with dire warnings…
    Read More “PA Dems, DRBC Squeal over Proposed Cut to DRBC Budget”

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    Marcellus Prejudice on Display at Washington, PA Church

    This is interesting, and sad, and maddening: A developer purchased a run-down, abandoned convent in downtown Washington, PA (for $11K) with plans to invest $300,000 to fix it up and put business offices in it. Or perhaps (this is the rumor) turn it into temporary housing for Marcellus Shale workers. That “M” word–that’s all it took. The pastor at the church across the street, Immaculate Conception, is against it. So too is the local town councilman. Their fear? Those disgusting, low-life “transient” workers will (don’t laugh) bring down the neighborhood. It won’t be safe to (don’t laugh) walk around at night. Because, you know, (whispering)…transients. Better to keep the old convent, a bombed-out looking eyesore, in downtown rather than have transients lurking about.

    Now if the developer was wise he would have said something about housing “undocumented workers” (i.e. illegal aliens) at the convent. That would magically make the project A-OK. Here’s the interesting/sad/maddening story:
    Read More “Marcellus Prejudice on Display at Washington, PA Church”

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    Marcellus Well Freeze-Offs Lower January Natgas Production

    Wells freezing from the brutally cold winter in the northeast has led to a slight decrease in the amount of gas production coming from the Marcellus, according to the U.S. Energy Information Administration and analysis by Bentek Energy (a division of Platts). Official numbers for January production from the EIA won’t be out until the end of March, but preliminary numbers indicate the cold weather is having an impact on supplies…
    Read More “Marcellus Well Freeze-Offs Lower January Natgas Production”