New Study Says Petchem Tax Credit Bill Would “Transform” PA

Pennsylvania House Bill (HB) 1100, aimed at attracting new petrochemical investment to the state, was passed by the PA House and Senate earlier this year. The bill provides a tax incentive for companies to build NEW plants in the state that use Marcellus methane gas. HB 1100 was finally delivered to the desk of Gov. Tom Wolf last week (see PA Petchem Bill Delivered to Gov. Wolf – Will He Sign It?). Wolf previously stated (for whatever strange reason) he would veto the bill. Republicans, Democrats, businesses, and labor unions have all pressured Wolf to reconsider and sign the measure into law. Now comes a bit more pressure.
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‘First of Its Kind’ Methane/Ethane PA Power Plant Now Online

CPV Fairview Energy Center (click for larger version)

Competitive Power Ventures’ (CPV) Fairview Energy Center, a 1,050-megawatt natural gas AND ethane-fueled combined-cycle electric generating plant in Cambria County, PA, went online ahead of schedule back in December (see CPV Marcellus-Fired Electric Plant in Cambria Goes Online Early). The plant went online using Marcellus gas (methane). However, the plant is designed to mix ethane in with methane and burn the mix. CPV announced yesterday tests for blending in ethane are now complete and the plant is operating at a 75/25 ratio of methane to ethane. According to CPV, Fairview Energy Center is “the first and only facility of its scale in the world to possess high content ethane blending with natural gas capabilities.”
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Some Mariner East 2 Construction Resumes During Lockdown

The confusion over whether or not the Mariner East 2 (ME2) pipeline project has (a) shut down all construction, except certain tidying up aspects at certain locations, or (b) has permission by the state to keep on building, is still not 100% settled. On Monday we told you that ME2 construction was in the process of ceasing under orders issued by Gov. Wolf (see Mariner East 2 Pipeline Construction Shuts Down re COVID-19). However, the PA Dept. of Community and Economic Development granted a waiver to ME2 for certain activities.

3/27/20 UPDATE: As we suspected and have now confirmed with an unnamed (but highly reliable) source, the ME2 sites issued waivers to continue construction on Wednesday, March 25th were areas deemed necessary to continue work in order to protect the environment or the public. While there are numerous “sites” where activity has resumed, it represents less than 20% of total project sites. For example, places where there were open cut ditches or partially complete HDDs (underground horizontal directional drilling), the company requested and was approved waivers to restart construction–after an extensive review by the Wolf Administration.
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EEIA Files Brief with U.S. Supreme Court Supporting PennEast Case

The Energy Equipment and Infrastructure Alliance (EEIA), a non-profit representing people and businesses who work in the energy infrastructure supply chain, filed an “amicus curiae” (friend of the court) brief in support of PennEast Pipeline’s request to get the U.S. Supreme Court. PennEast has asked the Supremes to overturn a lower court decision that allows states like New Jersey to usurp federal authority by blocking PennEast, a FERC-approved pipeline.
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COVID-19 Crisis Slams the Brakes on Anti-Fossil Fuel Shenanigans

If there’s a silver lining in this tragic COVID-19 coronavirus crisis, this may be it: Radicals who want to deny everyone the right to use fossil fuels with their unending campaigns of protests and legal actions are pretty much stopped in their tracks. They can no longer make mischief to block pipelines and shale drilling and the use of natural gas by ordinary citizens (via municipal bans). The virus has stopped most court cases, public hearings, and even the right to assemble and protest. Antis are apoplectic and scared that pipeline and drilling projects will get approved and move forward because antis can’t bully public officials and courts into bending to their twisted anti-fossil fuel views.
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U.S. Explores Luring Saudis Away from OPEC into New Oil Alliance

OPEC, the Organization of the Petroleum Exporting Countries, is a pact of colluding oil-producing companies that act to artificially lower or raise the price of oil around the world based on how much the colluders are willing to pump. OPEC is the antithesis of free trade. But it does serve a purpose that (unfortunately) all oil drillers, including U.S. drillers, depend on–keeping prices high enough to be profitable. OPEC added Russia in a loose confederation for the past three years or so, something referred to as OPEC+. But then Russia recently told Saudi Arabia, the main OPEC player, to kiss off and left the OPEC+ fold, preferring to pump as much oil as they can. Saudi Arabia responded by increasing its production too, to drive prices into the basement, causing Russia (and U.S. shale drillers) pain.
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Barclays Warns Oil Price Could Sink to $10/Barrel

A week ago we brought you the story that predicted the price of oil would go from the $30/barrel range down to the $20/barrel range–something almost unthinkable. And then it happened within a few days! Now we’re reading of warnings from Barclays, one of the biggest banks in the world, that the price of oil may go as low as (GASP) $10/barrel. At that price, there’s maybe one producer in the world that can still make at least some money–Saudi Arabia. Everyone else would be upside down and heading for bankruptcy court.
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PA’s Conventional Oil Industry Goes from Bad to Worse

The double shock of less demand for oil because the COVID-19 coronavirus crisis has shut pretty much everything down (worldwide) AND the Saudis and Russians pumping oil to the outer limits, continues to cause the price of oil to remain at historically low prices. The Russians are trying to bankrupt American shale oil drillers by driving prices into the basement. The Saudis are trying to bankrupt Russia for leaving the OPEC+ fold (and the Saudis certainly don’t mind if American shale oil drillers are put out of business in the process). The low price resulting from the double shock is affecting not only big American shale oil drillers but also mom and pop conventional oil drillers too. Particularly small conventional drillers in western Pennsylvania.
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Green Graft: Dems Block COVID-19 Relief to Push Enviro Programs

Sen. Chuck Schumer and Speaker Nancy Pelosi are the lowest of the lowest. They are blocking COVID-19 aid to suffering American people and businesses, holding the aid package hostage, in a bid to play to their radicalized political base. They are holding up an aid deal in order to, among other things, fund Big Green projects. Green lard. Graft. Corporate welfare that decimates fossil fuels and favors so-called renewables. “Democrats won’t let us fund hospitals or save small businesses unless they get to dust off the Green New Deal,” said Senate Majority Leader Mitch McConnell in a floor speech yesterday. This is tragic. This is despicable. This is UNFORGIVABLE.
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API Asks Trump to Cut Gov’t Red Tape During COVID-19 Crisis

The American Petroleum Institute (API) wrote a letter to both President Trump and the federal Environmental Protection Agency last Friday asking for “non-essential compliance obligations” to be temporarily waived. Such obligations include “record-keeping, training and other non-safety requirements.” The oil and gas industry wants to be able to better and more quickly distribute fuel during the COVID-19 coronavirus crisis–using fewer people to do so. Government red tape is enormous. API is simply asking the government to cut some of that red tape on a temporary (not permanent) basis to get the job done during this crisis.
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It’s Time for a $40/Barrel Tariff on Saudi Oil Coming into U.S.

Last Friday MDN laid out three potential options for how the U.S. government can deal with the Saudis and Russians flooding world markets with oil, driving the price into the basement in a bid to bankrupt American shale oil drillers, a practice called dumping (see U.S. Sen. Kevin Cramer Asks Trump to Embargo Saudi/Russian Oil). Option #1 was 13 U.S. Senators who politely asked the Saudis to knock it off. So far that hasn’t worked. Option #2 would be to impose a tariff on all imported oil. And option #3 would be to slap an embargo on imported oil. The American Petroleum Institute doesn’t want either a tariff or embargo. Some of the rank and file (oil drillers themselves) disagree with their lobbying group…
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Rollback of Obama EPA Overregulation in Trouble from COVID-19

Before Lord Obama and the EPA Obamadroids left office, they inflicted a great deal of damage to this country via onerous and outrageous new regulations. When President Trump took office, he immediately began to roll back and rightsize regulations at the EPA (and elsewhere), scaling back overregulation to common-sense regulation. We’re talking about regs like the horrible so-called Clean Power Plan. The Obamadroids and Big Green lobby (one and the same, with gobs of money) have litigated Trump’s efforts to restore sanity to EPA regulations every square centimeter of the way.
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Mariner East 2 Pipeline Construction Shuts Down re COVID-19

As we told you last Friday, there was some confusion over whether or not construction of the Mariner East 2 (ME2) pipeline, which is nearing completion, is included under Pennsylvania Gov. Tom Wolf’s “stop work” order to prevent PA residents and workers from further spreading the COVID-19 coronavirus (see Is ME2 Pipe Construction Stopped Following Wolf COVID-19 Order?). Pipeline infrastructure and utilities are on the “life-sustaining” list, both in PA and as a directive from the federal government. However, “Utility Subsection Construction” was on the non-life-sustaining list–due to be temporarily shut down. ME2 construction continued after Wolf’s Thursday order. The confusion has now cleared, and yes, ME2 construction is in the process of ceasing.
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OH Town Building Reservoir to Feed NatGas-Powered Electric Plant

Advanced Power Services is building a 1,100-megawatt natural gas-fired electric generation facility in Wellsville, Columbiana County. Dominion Energy is building 5 miles of new pipeline, called the West Loop Project, from western PA into Ohio to feed the Wellsville plant (see Dominion Pipeline to Feed Western PA NatGas to OH Power Plant). The new electric plant will need a lot of water. The Buckeye Water District in Wellsville voted last Thursday to move forward with bids to construct an 18-million gallon reservoir to supply water for the electric plant.
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Tiny Ceramic Beads Boost Utica Production, but Not Marcellus

We spotted an interesting article appearing in the American Oil & Gas Reporter about results from using tiny ceramic beads as a proppant in oil and gas wells in several shale plays. Typically sand is used as a proppant to “prop open” tiny fractures to allow oil and gas to escape from shale rock. Sometimes ceramic beads are used. The article is based on a paper delivered at the Society of Petroleum Engineers’ Hydraulic Fracturing Technical Conference & Exhibition, held Feb. 4-6 in The Woodlands, Texas. Of particular interest to us are the findings for the Utica and Marcellus. The “micropropped” Utica wells showed a marked increase in oil production, while no such increase in production happened in micropropped Marcellus wells.
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Shale Slows Down This Year & Next; the 5 Stages of Shale Grief

It certainly doesn’t feel as though we’ve hit the bottom yet when it comes to the effect of the coronavirus and Saudi-Russia oil price war on American shale companies. We still have a way (down) to go, unfortunately. But all is not lost. There is hope on the horizon. That’s the message we take from comments by an Enverus analyst. According to RBN Energy, we’ve seen this movie before. Maybe this movie has a different storyline, but the plot is the same. Can we predict how it will play out this time based on previous downturns? RBN offers up the five stages a shale play goes through.
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