Industrywide Issues

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    NYT, Boston Globe Delve into Russian Gas Coming to America

    The more we read about and dig into the story of Russian gas coming to Boston, the angrier we get. Just yesterday we told you that a rumored second shipment of Russian gas may be heading to Boston (see 2nd LNG Tanker with Russian Gas Coming to Boston?!). We have more details about the story. According to a New York Times article, in 2014 then-President Obama slapped sanctions on the “financiers and producers of Russian oil and natural gas, not the output.” Russia, at that time and since, has tried to “destabilize eastern Ukraine” with an ongoing occupation of Crimea. Sanctions against the financial services and energy sectors followed. Vladimir Putin (one of his cronies) was building an LNG export plant in the Arctic–Yamal LNG. The sanctions were aimed at stopping the plant from getting built–but it got built anyway with the help of Chinese banks. Yamal’s very first shipment of LNG recently left the facility and (as we previously outlined) was offloaded for a couple of days in the UK (see Confirmed: LNG Coming to Boston on Jan 22 is Illegal Russian Gas). What we still don’t understand is this: How can you impose sanctions on the financers and producers, but not on the outcome, the production (gas) itself? That seems crazy. We still think the gas is illegal–but nobody in D.C. (wake up Trump Administration!) is doing anything to stop it. Regardless of whether or not the shipments are illegal, even the far-left libs at the Boston Globe think this is nuts. It is humiliating (and an outrage) that sanctioned Russian gas–the VERY FIRST SHIPLOAD–is now being unloaded in Boston Harbor…
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    2nd LNG Tanker with Russian Gas Coming to Boston?!

    Gaseyls tanker (now docked in Boston Harbor)

    A shipment of arguably illegal Russian natural gas (LNG) arrived in Boston Harbor on Sunday and will soon be offloaded, according to Russian news service Sputnik International. The U.S. slapped the Russian Yamal LNG plant, located in the Arctic, with sanctions following Russia’s moves against the Ukraine several years ago. Those sanctions make it illegal to receive gas produced from that plant. So shippers “whitewashed” the gas by unloading it in the UK, and a few days later, reloading it on a different ship–the Gaselys. The Gaselys is now docked and undergoing inspection and will then offload the gas for use in New England. It is an outrage that for a couple of reasons: (1) because New England is blocking pipelines from the Marcellus that would carry domestically produced gas that is cheaper, and (2) the Jones Act prevents our ships from the Gulf Coast and other locations from carting our own LNG to Boston. So, using a slight-of-hand to hide the origin of the gas, illegal Russian gas has now arrived and will be used in New England to heat homes–while they watch the Superbowl. Plenty of irony, wouldn’t you say? But the outrage doesn’t end there. A second shipment of Russian gas is rumored to be on its way to Boston. HELLO–IS ANYBODY AWAKE IN D.C.? How can this continue? Here’s an update on the first shipment now arrived, and a second shipment that quite possibly is now on its way…
    Read More “2nd LNG Tanker with Russian Gas Coming to Boston?!”

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    NTE Energy Plans to Build 550 MW Gas-Fired Elec Plant in CT

    Artist rendering of Killingly Energy Center – click for larger version

    In April 2016, MDN told you NTE Energy, headquartered in St. Augustine, Florida, plans to build several new natural gas-fired electric generating plants, one of them in Connecticut (see NTE Energy Developing 3 NatGas-Fired Electric Plants in CT/NC/OH). Since that time NTE has been busy with all of three projects. The Connecticut project is called Killingly Energy Center, a 550-megawatt plant that will be located near Killingly, CT. NTE has secured a site for the plant, filed a request to connect to the power grid, filed for an air permit and filed with the siting council. NTE expects to get all of the various permits they need sometime by the second quarter of this year (May-June time frame). When they do get the necessary permits for Killingly, construction will begin (in 2Q of this year). No doubt Marcellus gas will feed the plant, which will go online in 2021 (it takes a few years to build these things). NTE will spend $500 million on the project and employ 250-350 people to build it. But what about the location? You know how allergic New Englanders are to any new natural gas-related infrastructure! NTE is also building a plant in Ohio. The mayor of the city where the Ohio plant is getting built (Middletown, OH) is giving his “full-throated support” of NTE and is telling Killingly they don’t have anything to worry about. NTE does what they say they’ll do, and they do it right. So far Killingly appears to be playing ball. Killingly Town Council approved agreements with NTE earlier this month. When the plant gets built, Killingly will see $90 million in tax revenue over the next 20 years. Who wouldn’t sign on the dotted line for 90 million bucks?! Below is news about the project along with a recent PowerPoint presentation loaded with information about the Killingly Energy Center…
    Read More “NTE Energy Plans to Build 550 MW Gas-Fired Elec Plant in CT”

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    WV Co-Tenancy, Royalty Transparency Bills Make Progress

    As predicated, a co-tenancy bill has been introduced in this year’s 60-day session of the West Virginia legislature (see Co-Tenancy Front and Center for WV Legislature as Session Nears). What is co-tenancy? It is legislation that will give a majority of rights owners of a property the authority to sign a lease on behalf of all the rights owners. It corrects a situation in which multiple rights owners are listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them to sign on the dotted line. Co-tenancy corrects that situation, opening up more Marcellus and Utica acreage that can be drilled. Last Thursday a co-tenancy bill was introduced in the House Energy Committee–House Bill (HB) 4268–which should see an initial vote this week. Various groups are lobbying for and against the bill. The WV Surface Owners Rights Organization is pushing for two amendments, without which they won’t support the bill. Although co-tenancy is a major emphasis for Marcellus/Utica drillers, a different bill is a major emphasis for landowners–a bill to provide greater transparency of royalty statements (more information provided on statements). House Bill (HB) 4270 already passed in a vote by the House Energy Committee last week. It still has to pass muster with the House Judiciary Committee, but the bill seems to be off to a fast start. Here’s a rundown on these two important bills, with copies of the bills as introduced, with background on the backroom wheeling and dealing over the co-tenancy bill…
    Read More “WV Co-Tenancy, Royalty Transparency Bills Make Progress”

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    WV Farm Bureau Urges Legislature to Tread Carefully re Co-Tenancy

    In another MDN post today, we do a deep dive into West Virginia House Bill (HB) 4268, the “Co-tenancy Modernization and Majority Protection Act” (see WV Co-Tenancy, Royalty Transparency Bills Make Progress). One of the organizations closely watching the progress of that bill is the WV Farm Bureau, which lobbies for the best interests of mineral owners, farmers and rural residents. What does the Farm Bureau think of the bill so far? Last week, on the very day HB 4268 was introduced, Farm Bureau director of Governmental Affairs, Dwayne O’Dell, penned an editorial in which he lends tepid support for the bill, IF there are protections built in for landowners. O’Dell begins his editorial by stating he’s worried that WV legislators are, “allowing oil and gas developers to take private property rights unfettered.” That is, they are literally “giving away the farm.” O’Dell is favor of “providing oil and gas companies with a reasonable platform to succeed.” But not at the expense of his members. Here’s a big, fat caution flag being waved by the WV Farm Bureau with respect to the co-tenancy bill, along with a call for the legislature to revisit the issue of “at the well head” pricing…
    Read More “WV Farm Bureau Urges Legislature to Tread Carefully re Co-Tenancy”

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    Seneca Indians Fighting Proposed Potter County Wastewater Facility

    Earlier this month MDN told you about a new shale wastewater treatment facility planned for Coudersport, in Potter County, PA (see Shale Wastewater Treatment Plant Planned for Potter County, PA). Epiphany Water Solutions, via a subsidiary company called Epiphany Allegheny, filed for a permit with the PA Dept. of Environmental Protection (DEP) to build a centralized water treatment facility in Coudersport back in July 2017. The DEP held a public hearing in Coudersport two weeks ago to gain local resident’s input on the facility. One of the groups objecting to the plant–a plant which produces water clean enough to drink–is the Seneca Nation (local Indian tribe). The Senecas, which live 65 miles down the Allegheny River from the proposed site, are making all sorts of wild accusations. Things like this plant will “permit poisonous contaminants” to flow down river to where the Senecas live. The Senecas, according to Epiphany, have been given “inaccurate information.” Epiphany vigorously denies the wild claims made by the Indians. What’s really kind of funny (for us) is that Epiphany and the Seneca Nation are really both on the same “green” side. As we explained in our previous article, Epiphany started life as a company with a mission to pioneer the use of solar technology to desalinate water so people in poor countries have safe drinking water. Laudable goal. However, Epiphany found they actually need to turn a profit and pay bills first. They found that their technology works equally well for the oil and gas industry. The very same technology used to desalinate/decontaminate dirty ocean water and make it drinkable can (and does) desalinate/decontaminate brine (salty water coming out of the ground long after drilling is over and done). Same tech! There is no “poisonous contaminates” in the cleaned-up water from Epiphany–but try telling that to the Senecas…
    Read More “Seneca Indians Fighting Proposed Potter County Wastewater Facility”

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    Landowners Who Negotiate with Shell Ethane Pipeline Get More $

    In February 2016, MDN exclusively broke the news that Shell had begun to sign leases with landowners for a 97-mile ethane pipeline (two branches) to feed their mighty cracker plant (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant). Since that time we’ve tracked any news we could find that reveals what Shell is paying landowners in Beaver County (and elsewhere) for the right to run the ethane pipeline (called the Falcon Ethane Pipeline) across their land. So far, we’ve seen rates as high as $75 per foot, and as low as $43 per foot. We just spotted another mention. An extensive (and well written) article in the Pittsburgh Post-Gazette interviews a number of landowners who have dealt with Shell, signing leases to allow the ethane pipeline across their land. The article opens with the story of a couple and their attempt to negotiate with Shell. If you play too hard to catch, Shell might route the pipeline around your land, onto your neighbor’s land instead. But sign too early, and maybe you’re leaving money on the table. It’s a fine line–causing stress and strain. In reading the article we really perked up when we read about Ed Bilik, founder of Greensburg-based Western Pennsylvania Gas Leasing Consultants. Ed was the first guy to sniff out the eventual path of the pipeline–which he did by knocking on doors to see where Shell landmen had already visited. Bilik eventually got 41 landowners to sign with him, allowing Bilik to help them with negotiations. According to Bilik, “Shell started out offering $40 per foot for the right to lay two pipelines.” Bilik would not say how much his clients eventually got from Shell, but he did say this: “We exceeded that [amount] multiple times,” meaning his clients got a whole lot more than $40/foot when they signed. Here’s a portion of this enlightening article…
    Read More “Landowners Who Negotiate with Shell Ethane Pipeline Get More $”

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    Dominion CEO Says Cove Point LNG Operational in “Early March”

    Earlier this month MDN brought you news that Dominion’s Cove Point LNG export facility along the shore of Maryland has delayed its official start-up until perhaps as late as April (see Uh-Oh: Cove Point LNG Exports Possibly Delayed Until April). An expert analyst theorized the reason for the delay is to install two flaring systems at the plant (a safety precaution). We still don’t know the exact reason for the delay, but we now have confirmation direct from the top at Dominion, from CEO Tom Farrell, that Cove Point will become operational and begin to export in “early March.” On an analyst phone call yesterday to discuss Dominion’s fourth quarter and full year 2017 results, Farrell had this to say about Cove Point…
    Read More “Dominion CEO Says Cove Point LNG Operational in “Early March””

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    OH Orphan Well Bill Wins Praise from Both Drillers & Enviros

    Pennsylvania state officials estimate there are as many as 200,000 abandoned (i.e. “orphan”) oil and gas wells in the state–the vast majority of them conventional wells drilled over 50 years ago. Most of them are not mapped or known. Some of them are hazards for shale drillers who stumble across them when drilling new wells. If you drill horizontally and clip an old/abandoned well, it becomes like an elevator pumping fluids and gas to the surface. Not good. Everyone is committed to finding and marking and capping these old wells–the question is, how do you pay for it? In PA, it’s an ongoing hot potato of who will pay (see Who Pays for Abandoned O&G Wells in PA?). Ohio has it a whole lot easier. There’s only an estimated 600 orphan wells in the Buckeye State. The issue of who will pay in Ohio is moot–the state itself pays for it (meaning Ohio taxpayers 2/4/18 correction: The funds come from the Oil and Gas Well fund which oil and gas producers pay into from the severance tax. Our thanks to OOGA for sending along that correction!). A new bill in Ohio just passed the legislature, House Bill 225, which triples the amount of money set aside to cap orphan wells. The bill also “creates a more streamlined and efficient process for identifying and plugging” orphan wells. The amazing thing about the bill is this: both Big Green groups and the drilling industry support it! When was the last time you heard of that happening?! Here’s more about HB 225, the bill everybody loves in Ohio. Who wouldn’t love a bill to help the orphans?…
    Read More “OH Orphan Well Bill Wins Praise from Both Drillers & Enviros”

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    ISO New England Warns Blackouts Coming If No New Gas Pipelines

    How often do we have to repeat the warning that electrical blackouts are coming to New England if the region does not get new sources of natural gas by building more pipelines? This is not some reckless, wild eyed blogger guy saying it–the warning comes from the top, from the people who operate the electric grid! We first raised the warning back in 2014 (see Officials: New England Faces Blackouts Without New Nagas Pipeline). Last May ISO New England–the independent, non-profit Regional Transmission Organization (RTO) that manages the electric grid for Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont–released a study that warned of a coming shortage of natural gas to fire electric power plants in wintertime (see Study: New England Electric Shortage from Lack of NatGas by 2025). ISO New England is back with another reporting warning of “dire scenarios in the future” if New England doesn’t wise up and get more natgas pipelines built. “Without additional natural gas pipeline capacity, rolling blackouts or other emergency actions will likely be needed by the winter of 2024-2025 to keep the power system operating reliably.” It’s sad to see New England’s so-called leaders continue to block new pipelines to the region. One or two well-placed pipelines from the Marcellus could help the region avert the completely predictable disaster that’s on the way…
    Read More “ISO New England Warns Blackouts Coming If No New Gas Pipelines”

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    PA Gov Wolf Floats Plan to Fix DEP Slow Drilling Permits: Hike Fees

    As part of the Pennsylvania Senate’s misguided and mangled budget bill last year, Republicans managed to slip in fixes to the state Dept. of Environmental Protection’s (DEP) chronic delays in issuing permits related to shale drilling (see PA Senate’s “Olive Branch” of “Relaxed Regulations” for Drillers). Unfortunately the fixes came out before the final budget passed. Problems remain for Marcellus drillers. Delays are long in the Keystone State when it comes to permits for shale wells. The problems NEED to get fixed, now. House Republicans recently introduced a series of five different bills to help address DEP’s chronic delays (see PA House Advances “Fix DEP & Other Agencies” Plan with 5 Bills). No doubt feeling the pressure from the legislature, PA Gov. Tom Wolf on Friday introduced his own plan. Whereas the plan floated by legislators would allow third parties to assist with the backlog, Wolf’s plan is different. In a nutshell, Wolf wants to allocate more money to the DEP so they can hire more help–not third parties. Yeah, that’s the answer! More government. (Yes, we’re being sarcastic.) And what magic pocket will Wolf pull the money from to pay for an increase in head count at DEP, especially since Wolf can’t balance a budget to save his life? Why, from the pockets of the shale industry, of course. Wolf proposes boosting the $5,000 fee drillers now pay when filing to drill a new shale well to $12,500–a 250% (2.5x) increase. You want that permit on time for a change? It’ll cost you, buddy…
    Read More “PA Gov Wolf Floats Plan to Fix DEP Slow Drilling Permits: Hike Fees”

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    After Months of Delay, Atlantic Coast Pipe Gets NC Water Permit

    Atlantic Coast Pipeline path through North Carolina – click for larger version

    On Friday, the North Carolina Department of Environmental Quality (DEQ) issued a federal stream/water crossing permit for Dominion’s $5 billion Atlantic Coast Pipeline (ACP)–a natural gas pipeline that will stretch from West Virginia through Virginia and slice through the midsection of North Carolina, almost to the border with South Carolina. The permit comes more than a year and a half after Dominion and their partners filed an application for it. It is the final “biggie” permit required to construct the project in NC. The Federal Energy Regulatory Commission (FERC) approved ACP last October (see FERC Approves Atlantic Coast, Mountain Valley Pipeline Projects). West Virginia previously issued a water crossing permit for the project, and Virginia recently granted a conditional approval for its water crossing permit. NC was the last domino to fall, and now it has. However, the project is still not out of the woods in NC just yet. First, the DEQ attached all sorts of extra requirements to the water permit they issued. Second, even though a water/stream crossing permit is the biggest and most important permit, NC continues to delay the project by withholding other permits (see NC Continues to Delay Atlantic Coast Pipe, Rejects Part of Erosion Plan). Friday’s water permit issuance was, however, a very positive development–a signal that the rest of the permits although delayed, will be forthcoming. Dominion said it will begin construction in NC (and VA and WV) this year, and finish the project sometime in 2019…
    Read More “After Months of Delay, Atlantic Coast Pipe Gets NC Water Permit”

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    Ohio Democrat Candidate for Governor Says He’ll Ban Utica Drilling

    Congressman Dennis Kucinich

    Congressman Dennis Kucinich from Ohio, who is running for the nomination to be the Democrat candidate for governor in this fall’s election, has always been a crackpot. A nutjob. Flaky. Ranging out there on the far-left fringe. But he’s also never been taken too seriously. Folks like him. He’s amiable. Not, perhaps, as hardcore as some on the left. That is, until now. In a speech last Thursday in Columbus to unveil his first official policy statement as a candidate, Kucinich said if he’s nominated and wins the governor’s chair (fairly unlikely, but then, you never know), he will use his executive powers as governor to end drilling for natural gas and oil in the state. He also said he would direct the state police to look for out-of-state wastewater haulers transporting brine to Ohio’s injection well sites–and have the police turn them around and send them packing. As for all those Utica Shale landowners who signed leases, what about royalties they will never see and signing bonuses they will never pocket? Don’t worry, Dennis will “work to ensure that landowners who have leased land for drilling would receive a separation fee and all royalties they are due.” Kucinich’s first policy statement for his gubernatorial campaign is a far-out, really wacko (certifiably insane) anti-fracking manifesto (full copy below). Everyone is likely to discount his words as, “That’s just Dennis, you know how he talks. He doesn’t stand a chance of winning.” However, we encourage Buckeye State voters to take him seriously–take him at his word. And make sure he doesn’t win the nomination (or the governorship). His election to the governor’s chair would be an economic disaster for the state and for the Utica Shale industry…
    Read More “Ohio Democrat Candidate for Governor Says He’ll Ban Utica Drilling”

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    #1 New Source of Demand for M-U Gas: Electric Power Plants

    According to MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), natural gas production in Pennsylvania, Ohio, West Virginia is growing faster than demand. Lately the Marcellus/Utica is producing 42% of all the natural gas produced by the nation’s seven largest shale plays (see EIA Jan ’18 Drilling Report: M-U on Fire, Up 1/3 Billion Cubic Ft). If you add together all natgas production sources (conventional and unconventional), M-U produced 27% of the entire nation’s natgas supplies in 2017–up from 2% in 2008. It is astonishing! But Houston, we have a problem. There still aren’t enough pipelines to carry our gas to other markets, where there is demand. And we in the M-U region don’t have enough of our own demand to keep up with the ever-growing supply. Although populations grow gradually over time, the fact remains the amount of gas used to heat and cool households, and businesses, and the amount of natgas used by industrial customers, remains pretty constant over time. It may grow a little, but not nearly as much as supply is growing, which keeps the price of natgas in our region in the basement. There is a ray of sunshine though. EIA says, “Almost all of the recent growth in natural gas consumption in these [M-U] states has been in the electric power sector.” Our observation/point: the power generation space and the shale drilling space are now bosom buddies–joined at the hip. Electric generation is a critical new market for our gas–about the only new market with the capacity to sop up meaningful portions of our ever-expanding supply…
    Read More “#1 New Source of Demand for M-U Gas: Electric Power Plants”

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    Canada Rejects Discounted Rates for U.S. Shale Gas to New Brunswick

    Maritimes and Northeast Pipeline map – click for larger version

    The Maritimes and Northeast Pipeline (M&NP) runs from Goldboro, Nova Scotia through Nova Scotia and New Brunswick to the Canadian – U.S. border near Baileyville, Maine. The pipeline continues through Maine and New Hampshire into Massachusetts where it connects with the existing North American pipeline grid at Dracut, Massachusetts. It used to be that offshore natural gas from Nova Scotia fed the pipeline, which ran from north to south. But those offshore fields are running low, and the Marcellus/Utica appeared. These days the M&NP runs from south to north–at least part of the system does. One of M&NP’s big customers is Irving Oil, with a refinery and cogeneration (natgas-fired) power plant in Saint John, New Brunswick. Irving is an M&NP customer. However, another pipeline company offered to build a new pipeline to feed Irving Oil’s operations with natural gas, at discount. M&NP said that’s crazy. They want to keep Irving as a customer, so they cut a deal with Irving to import natural gas from the U.S. (in all likelihood, Marcellus/Utica gas), flowing the gas from the Maine border to St. John and Irving’s operation there. The only thing standing in the way is the Canadian National Energy Board (NEB)–which is kind of like our own Federal Energy Regulatory Commission (FERC). The deal offered by M&NP requires NEB approval because it lowers the toll (fee charged) and changes directions to import/flow U.S. gas to Irving. Last week the NEB rejected M&NP’s plan, saying the plan is “premature” because the Maritimes region is facing a period of uncertainty. It is not clear (to the NEB) where natural gas will ultimately come from, and what the market actually needs. Offshore? Canadian fields? Import from U.S.? It’s not yet clear how it will all shake out. So the NEB turned down M&NP’s request. What happens now?…
    Read More “Canada Rejects Discounted Rates for U.S. Shale Gas to New Brunswick”

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    Swamp Fights Back: NRDC Gears Up to File Multiple Lawsuits vs EPA

    Big Green leftists HATED President Richard Nixon (frankly, they hate any/every Republican before and since). They hated Nixon even though he created the Environmental Protection Agency (EPA). Did you know that Nixon created the EPA? And now the EPA’s first-ever Secretary, William Ruckelshaus (a card-carrying member of the swamp dweller’s club) is criticizing current EPA Sec. Scott Pruitt for returning the EPA to its roots–to clean up superfund sites and target polluters. Pruitt has pledged to roll back EPA’s cancerous expansion under Obama, with its wild attempt to regulate anything and everything under the excuse of trying to prevent man-made global warming. Why are we not surprised that a has-been like Ruckelshaus is criticizing Pruitt? Ruckelshaus isn’t the only swamp dweller who hates Pruitt (and yes, hate is the accurate word to use). The National Resources Defense Council (NRDC), one of the worst of the worst so-called environmental groups, recently said it is gearing up to launch dozens (!) of lawsuits against the EPA and Pruitt. NRDC is part of the Washington, D.C. swamp. It seems the swamp doesn’t like getting drained and is fighting back. That’s OK. President Trump loves a good fight. It’s about time somebody took the fight to unelected, Big Government-loving nongovernmental organizations like NRDC. Rather than taking something away, Trump and Pruitt are trying to return the EPA to its original mandate. Make no mistake. At it’s core this is a fight about fossil fuels. Big Green disastrously wants to kill the use of fossil fuels–NOW. Here’ a look at how the swamp is fighting back against Trump’s efforts to drain it…
    Read More “Swamp Fights Back: NRDC Gears Up to File Multiple Lawsuits vs EPA”