Industrywide Issues

Industrywide Issues | Research

Marcellus Shale Top 15 Drillers (from S&P Report)
October 18, 2012October 18, 2012

MDN highlighted an important and insightful new study from Standard & Poor’s yesterday titled “How The Marcellus Shale Is Changing The Dynamics Of The U.S. Energy Industry” (see this MDN story). There’s a lot of great content in the study, some of which deserves to be highlighted in separate posts here on MDN. One such section is their “Top 15 Drillers” in the Marcellus, as ranked by how much natural gas is produced by those drillers in the Marcellus. We’ve inserted the chart below, re-worked by MDN.

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Chesapeake Energy | Economic Impact | Energy Companies | Industrywide Issues

Top 20 U.S. Natural Gas Producers
October 18, 2012October 18, 2012

MDN highlighted part one of a new series of articles appearing on the Seeking Alpha website on the topic of rig counts and what they see as a coming natural gas shortage (see this MDN story). The series continues with part two. Of keen interest in the second installment is a slide from a Chesapeake Energy presentation showing the top 20 U.S. natural gas producers (based on production volume) with columns showing how many rigs they’re running and the percentage change in the number of rigs from January of 2010 to September 2012. Most startling is Chesapeake’s own rig count, which has gone from 110 active rigs in 2010 to just 9 at the end of September 2012—a 92% reduction. Wow!

There’s a lot of great detail in this chart. Here it is (click on the chart for a larger view):

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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Research | Statewide PA

New Website Debuts Listing Research, Articles on Marcellus
October 18, 2012October 18, 2012

Carnegie Mellon University, the University of Pittsburgh and the Pennsylvania State Association of Boroughs have collaborated to create an important new website aimed at providing links to research and articles on the web for public officials and the public in general on the topic of the Marcellus and Utica Shale. The website, called “A Research Guide to the Marcellus and Utica Shales” (www.andrew.cmu.edu/org/marcellus-biblio), links to over 1,200 research studies, articles and other resources. The information is categorized making it easier to locate related articles.

If you happen to click the category for “In the News” (their list of resources that regularly write about the Marcellus/Utica) you’ll find MDN in their select and very short list of 19 news resources. Obviously someone working on the project has good taste. 😉 Here’s the background for how the project and website came to be:

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Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

PA Supreme Court Hears Testimony on Act 13 Zoning
October 18, 2012October 18, 2012

Yesterday MDN told you about what we consider the most important oil and gas drilling case to go before the Pennsylvania Supreme Court in many years (see this MDN story). The PA Supremes heard arguments (yesterday) in what MDN considers the second most important O&G case to be heard in years—whether or not the zoning provisions in the Act 13 law are constitutional. Were there any indications from the questioning which way the judges might rule?

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Hydraulic Fracturing | Industrywide Issues | Mahoning County | Ohio | Regulation

Youngstown, OH Votes to Allow Fracking Inside City Limits
October 18, 2012October 18, 2012

Last night Youngstown, OH City Council voted to allow natural gas and oil drilling inside city limits. Here’s how it went down:

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Hydraulic Fracturing | Industrywide Issues | Wastewater

Chemical & Engineering News Article: Cleaner Fracking
October 18, 2012October 18, 2012

The cover story for the current issue of Chemical & Engineering News (published earlier this week) takes a stab at explaining the process, technology and industry that’s arisen to treat fracking wastewater. From chemicals to evaporators, the article covers it all, complete with a very handy graphic detailing the process (see below).

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Commodity Price | Economic Impact | Hydraulic Fracturing | Industrywide Issues | Pipelines

S&P Report: The Marcellus Shale is a Game-Changer
October 17, 2012October 17, 2012

Ratings agency Standard & Poor’s yesterday issued an important new report on the Marcellus Shale and the key role it’s playing in the United States’ natural gas and larger energy picture. Titled “How The Marcellus Shale Is Changing The Dynamics Of The U.S. Energy Industry,” there’s a lot of great information in this report. For example: the report lists the Top 15 Marcellus Shale producers, with estimates of how much shale gas they produce (as of fourth quarter 2011). It also discusses how and why the Marcellus is one of the most cost-effective plays in the U.S. for producers, and why they can make money in the Marcellus at much lower commodity prices for gas than in other plays. It contains a complete list of pending and planned pipeline projects in the Marcellus, including ethane pipelines. And more!

MDN is still reading and digesting the report and will bring you select sections and highlights over the next few days. In the meantime, you can view the entire report below now (highly recommended):

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Industrywide Issues | Litigation | Pennsylvania | Statewide PA | Susquehanna County

PA Supreme Court Hears Arguments in Critical O&G Case
October 17, 2012October 17, 2012

Yesterday the Pennsylvania Supreme Court heard arguments in what MDN considers the most important oil and gas case to come before the court in many years. We’ve chronicled the case called Butler v Powers in past articles, including this article from Sept. 2011. It’s a complex case, and at the risk of oversimplifying it, here’s how we would summarize it:

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Commodity Price | Economic Impact | Industrywide Issues

Stone Fox Capital: Rig Count Means NatGas Shortages Coming
October 17, 2012October 17, 2012

Let’s take a deep dive into the “weeds” of the drilling industry, shall we? A few days ago MDN highlighted yet another excellent analysis (on rig counts) by Seeking Alpha blogger Richard Zeits, from Zeits Energy Analytics (see this MDN story). The big news from that story is Zeits’ view about the current and future levels of drilling rigs in dry vs. wet gas areas.

A new, somewhat contrary (to Zeits’) viewpoint has emerged on Seeking Alpha from Stone Fox Capital Advisors expressing concern and alarm over the relatively low level of drilling rigs. They believe the current and forecasted number of drilling rigs for oil means the number of rigs available for natural gas drilling is so low it will mean shortages of natgas rigs, meaning a bottleneck for new drilling and eventually lower supplies and higher prices for natural gas.

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Hydraulic Fracturing | Industrywide Issues | Mahoning County | Ohio | Regulation

Youngstown, OH: If You Lease It, Will They Drill?
October 17, 2012October 17, 2012

Our headline is a tongue-in-cheek play on the iconic Field of Dreams statement, “If you build it, they will come.” But this isn’t fiction. It’s a very serious question being asked by residents and political leaders in Youngstown, Ohio: If Youngstown decides to pass an ordinance allowing drilling on and under property within city limits, will any drillers bother to drill there? Answer: No one knows.

Last night Youngstown held a public hearing to allow residents the opportunity to express their support or opposition to a proposed ordinance which may soon be passed to allow leasing and drilling inside the city. Here’s what happened:

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Accidents | Hydraulic Fracturing | Industrywide Issues

MSC Issues Guidance on Reporting Stray Gas Incidents
October 17, 2012October 17, 2012

Yesterday the Marcellus Shale Coalition (MSC), an industry-backed trade group based in the Pittsburgh area, published the fourth in a series of “guidance documents.” The latest document is titled Responding to Stray Gas Incidents (embedded below) and addresses the issue of what to do when a driller discovers that methane is already present in soil or water, even before they drill.

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Hydraulic Fracturing | Industrywide Issues | New York | Sullivan County

RIP Fracking Supporter Noel van Swol of Sullivan County, NY
October 17, 2012October 17, 2012

Tragedy struck on Monday after the pro-fracking rally in Albany, NY when long-time resident of Sullivan County, NY (and outspoken supporter of fracking) Noel van Swol died in a car crash on his way home from the rally:

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Albany County | Hydraulic Fracturing | Industrywide Issues | New York | Public Opinion | Regulation | Statewide NY

1,000 Pro-Drillers Rally in Albany with a Message of ‘Jobs’
October 16, 2012October 16, 2012

$math challenged$ Are AP reporters math-challenged, or do they intentionally lie about the events they cover? Yesterday a rally was held in Albany, NY to support shale gas drilling in the state. According to a reporter from Middletown who covered the event, there were “about 1,000” people in the crowd. But the AP (and almost all stories found in the media today about the event use the AP’s coverage) said there were “several hundred” in attendance. If you look closely, you’ll see the AP story was posted at 3:02 am yesterday, before the event took place!

Enough of the rant against mainstream media bias which we all know exists. Yesterday a group of 1,000 or more gathered at the Corning Preserve on the Hudson River in Albany for a rally. The group then marched to the Capitol with signs, chanting as they went. Here’s reporting from someone who was actually there:

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Commodity Price | Industrywide Issues | Pipelines

Reuters Says Marcellus Pipelines will “Bully” Gas Prices
October 16, 2012October 16, 2012

Reuters has just posted an analysis of the major new pipeline capacity coming online in the Marcellus Shale region later this year and in 2013. The tone and tenor of the piece is “oh oh, natgas prices are screwed” because of all this extra capacity coming online. Here’s part of the article, which points out an additional 3 billion cubic feet per day of capacity will be online in the Marcellus in the next three months:

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Industrywide Issues | Ohio | Statewide OH | Wealth Management

Caution: Royalty Buyers Coming Out of the Woodwork in Ohio
October 16, 2012October 16, 2012

A tale of caution for landowners in Ohio and in other areas where landowners have recently signed leases to allow drilling for shale gas. One landowner in Ohio reports being called by a Texas company looking to buy his royalty rights. The landowner already signed a lease and got his signing bonus. The company in question wants to now purchase the man’s future royalty payments—at a discount of course.

This is similar to companies buying other structured settlements—like someone who successfully sues for damages from an accident, but the payments are made over the course of several years. Or someone who wins a state lottery that has a payout over 25 years. Companies will offer to pay you less than what you would make over the course of time, but you get a lump sum payment now, up front.

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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

List of PA Impact Fee Disbursements by County/Town
October 16, 2012October 16, 2012

The checks divvying up $204 million raised by Pennsylvania in a new tax, called an “impact fee” on shale gas drilling, will be mailed out within 10 days. Why is the so-called impact fee a tax and not really a fee? Because 40% of the “fee” goes to communities where there is no drilling! Taking from one to give to another who didn’t earn it is a tax, and a 40% tax was the political price to be paid in order to get new drilling legislation passed. Politicians in places like Philadelphia had both hands out and would not vote in favor of the Act 13 law unless those palms were greased. It’s sleazy, but it’s politics in PA.

A full and detailed list of counties and townships and their share of the impact “fee” revenue is embedded below. Philly made out better than most drilling communities:

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