Industrywide Issues

Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

IOGA NY Strongly Worded Letter to DEC Commissioner Martens
November 8, 2011November 3, 2012

The Independent Oil and Gas Association of New York (IOGA NY), after studying the new draft drilling rules issued by the state Department of Environmental Conservation (DEC) wrote a letter to DEC Commissioner Joe Martens and Gov. Andrew Cuomo on September 2 stating that the new rules, as written, are not acceptable if the state wants there to be any shale gas drilling. A copy of the 15-page letter with attachments (31 pages total) was obtained by Gannett News and can be downloaded below.

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El Paso | Energy Services | Enterprise Products Partners | Industrywide Issues | Kinder Morgan | MarkWest Energy | Pipelines | Sunoco Logistics

How Many Ethane Pipelines will the Marcellus Shale Support?
November 8, 2011November 8, 2011

In yesterday’s Pittsburgh Business Times, reporter Anya Litvak does a good job of analyzing the prospects for various ethane pipelines that may (or may not) be constructed from the Marcellus region to other geographies in order to process the ethane into ethylene (a raw material used in making plastics). She keyed off the news that the joint venture from El Paso Corp. and Spectra Energy to build a Marcellus Ethane Pipeline Systems (MEPS) didn’t attract enough interest for it to go forward.

However, as MDN mentioned yesterday, Enterprise Products Products is building an ethane pipeline and Chesapeake Energy will be its first customer (see this MDN story). That pipeline is due to go in service in 2014.

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Chesapeake Energy | Economic Impact | Energy Companies | Energy Services | Enterprise Products Partners | Industrywide Issues | Jobs | Pipelines | Statewide WV | West Virginia

WV Officials Angry with Chesapeake Over Ethane Pipeline Deal
November 7, 2011November 7, 2011

State officials in West Virginia are angry with Chesapeake Energy over the announcement that Chesapeake has signed a deal to ship ethane out of the Marcellus region via pipeline to the Gulf Coast for processing. A quick petrochemical lesson: Some of what comes out of the ground when drilling for natural gas is the chemical compound ethane—especially found in “wet gas” areas of the Marcellus like West Virginia. Ethane can be processed into ethylene, which is the raw material used to make plastics.

West Virginia and Pennsylvania have been heavily courting Shell and at least one other unnamed company to build a “cracker plant” to process the ethane (crack it) into ethylene. Building a cracker plant in the region would attract thousands of jobs and billions of initial investment, and billions in revenue from associated plastics industries that would sprout up around the plant. It’s like winning the biggest imaginable lottery jackpot when it comes to jobs, money and tax revenue.

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Industrywide Issues | New York | Statewide NY | Taxation

NY DEC Panel Quietly Considers New Shale Gas Drilling Tax
November 7, 2011November 7, 2011

The New York State Department of Environmental Conservation, while holding up a release of new drilling regulations, has “quietly” begun considering different taxation scenarios for when and if shale gas drilling actually begins. Last month, the DEC sent 7 of the 18 members of the Hydraulic Fracturing Advisory Panel three separate charts with scenarios for taxing shale gas production. The members receiving the charts sit on a subcommittee charged with figuring out a way to pay for additional staff and resources that would be needed by the DEC and other state agencies once drilling begins.

Bear in mind under existing New York State law there is already an ad valorem tax (property tax) that will yield a lot of money from shale gas production, but all of that money stays in the local community, going to the town, county and school districts. The DEC Advisory Committee is tasked with figuring out how to grab a piece of the drilling revenue pie in order to fund their own expansion as they ramp up to handle the demands of new drilling activity.

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Broome County | Hydraulic Fracturing | Industrywide Issues | New York

Water & Energy Development Forum in Binghamton on Weds
November 7, 2011November 7, 2011

MDN received the following invitation for readers that live within driving distance of Binghamton, NY to a forum discussing water issues in shale gas drilling, on Wednesday, Nov. 9th:

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Bradford County | Chesapeake Energy | Energy Companies | Industrywide Issues | Jobs | Pennsylvania

Chesapeake Creates Hands-On Rig Training Center in Bradford PA
November 7, 2011November 7, 2011

Chesapeake Oilfield Services has just launched a hands-on training program at its Eastern Housing Center and Training Facility in Athens Township (Bradford County), PA. They’ve installed a working drilling rig at the facility to give new hires real-world, hands-on training. The primary aim of the facility is to teach new workers safe work habits while learning how to handle rig equipment. In addition to the rig, a water transfer system has also been installed to teach workers how to safely and efficiently deliver water from its source to the drilling site, especially in sub-freezing temperature.

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Hydraulic Fracturing | Industrywide Issues

EPA Releases Plan to Study Fracking, Jumps the Gun
November 4, 2011November 4, 2011

Yesterday, the federal Environmental Protection Agency (EPA) finally released its plan with specifics for how it will conduct research into the question of whether or not hydraulic fracturing contaminates, or otherwise negatively impacts, drinking water supplies. A copy of the 190-page plan is embedded below.

The first (preliminary) results from the study are due in 2012, but a final report is not due until 2014. In order to meet those deadlines, the EPA has already begun collecting field data and water samples. The problem is, that data was collected before the the plan itself was completed—before the rules for how the data collection should be done were established. Industry groups rightly have asked EPA Administrator Lisa Jackson how data collection for the study can begin before the methodology, the “how we will do this” part of the study was complete. It immediately calls into question the veracity of the data itself.

The EPA has “jumped the gun” by starting before the methodology was released. GIGO—garbage in, garbage out.

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Chesapeake Energy | Energy Companies | Energy Services | Enterprise Products Partners | Industrywide Issues | Pipelines

Chesapeake First Customer for Ethane Pipeline to Gulf Coast
November 4, 2011November 4, 2011

Looks like Enterprise Products’ plan to build an ethane pipeline from the Marcellus and Utica Shales to the Gulf Coast (see this MDN story) is already paying off. Chesapeake Energy is the first company to commit to using the pipeline, which is due to be completed and in service by 2014.

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Economic Impact | Industrywide Issues | Kanawha County | West Virginia

Charleston WV Shows Community Support for Cracker Plant
November 4, 2011November 4, 2011

Residents of Charleston, WV want large energy companies looking to locate an ethane cracker plant in the Marcellus region to know that residents of Charleston want it and welcome it with open arms. An online letter-writing campaign has been launched to show community support for the project, which is estimated to bring more than 12,000 new jobs and some $7 billion in economic activity to the region where it’s built.

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Hydraulic Fracturing | Industrywide Issues | Statewide WV | West Virginia

WV Official: No Cases of Water Contamination from Fracking
November 3, 2011November 3, 2011

$frack here frack now$ The top oil and gas regulator in West Virginia said at a conference on Wednesday that he has not seen any confirmed cases of groundwater contamination from fracking in West Virginia.

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

PA Lawmakers Close to Passing New Drilling Rules, Impact Fee
November 3, 2011November 3, 2011

Pennsylvania lawmakers are getting close to passage of legislation that would adopt many of the recommendations from Gov. Tom Corbett’s Marcellus Shale Advisory Commission, including an impact fee on wells and including a measure that would supersede some local drilling ordinances.

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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Public Opinion | Statewide PA

Mercyhurst Poll: Majority of PA Residents Support Fracking
November 3, 2011November 3, 2011

Mercyhurst College recently completed a statewide poll in Pennsylvania covering several issues, one of which is Marcellus Shale drilling in the state. A copy of the full questions and responses is embedded below. On the straightforward question, “Do you favor or oppose extracting natural gas through fracking in Pennsylvania’s Marcellus shale region?” the results were: Favor 55%; Oppose 27%; Depends 9%; Don’t Know 9%. A very clear and convincing majority of Pennsylvanians support fracking.

From the Mercyhurst press announcement summarizing the results:

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Energy Services | Enterprise Products Partners | Industrywide Issues | Pipelines

Enterprise Wants to Build Ethane Pipeline to Gulf Coast
November 3, 2011November 3, 2011

Enterprise Products Partners L.P. is planning to build a major new pipeline to transport ethane from the Marcellus and Utica Shale regions in Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast.

The second largest component (by volume) to come out of the ground in shale gas drilling is the chemical ethane. Somewhere between one and six percent of natural gas coming from the ground is ethane, which can be converted to the hydrocarbon ethylene. Ethylene is the “feedstock” (or raw material) used to make most plastics, including polyethylene and PVC. Enterprise wants to provide a way for ethane to reach the ethylene processing plants along the Gulf Coast.

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Energy Companies | Hydraulic Fracturing | Industrywide Issues | Lackawanna County | Pennsylvania | Regulation | Southwestern Energy

Benton Twp Supervisors Back Down on Exploratory Well
November 3, 2011November 3, 2011

Rather than pay legal fees to defend their legislation, the supervisors in Benton Township (Lackawanna County), PA voted Wednesday to change the language of their legislation restricting the drilling of an exploratory well by Southwestern Energy. The supervisors voted to grant Southwestern the right to drill the exploratory well back in June, but slapped 18 specific (and costly) conditions on the project, making it unfeasible according to Southwestern who challenged 11 of the 18 conditions. The supervisors changed 9 of those 11 yesterday.

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Economic Impact | Industrywide Issues | Jobs

PA Economist Says Shale Gas Only Way to Economic Recovery
November 3, 2011November 3, 2011

Edmond Seifried is professor emeritus of economics at Lafayette College in Easton, PA. He says that fiscal and monetary policy used by the Federal Reserve has not and will not work. He says that natural gas is not just the best, but the only way for the U.S. to recover from the current economic malaise.

Seifried points out the obvious: The less money we spend on foreign oil and invest in our own energy sources (in particular natural gas), the more the country’s Gross Domestic Product (GDP) will increase, meaning more jobs here at home, and more money that stays here in our country.

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Air Quality | Industrywide Issues | Ohio | Regulation | Statewide OH

Ohio EPA Seeks Public Comment on New Air Permit for Drilling
November 3, 2011November 3, 2011

The Ohio Environmental Protection Agency (EPA) is asking for public comments on a draft permit that controls air emission standards for shale gas drilling. The new standards do not affect the actual drilling and fracking activities because those are regulated by federal rules. The Ohio permit would regulate emissions from generators, dehydration systems and other “peripheral” activities that go on in the drilling process. A copy of the draft permit can be downloaded here.

From the Ohio EPA press release about the new air permit:

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