Industrywide Issues

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    Pathfinder Resources Completes First Marcellus Deal

    Less than three weeks ago MDN told you about District 5 Investments, an energy-focused private equity firm based in Texas, which has formed a new subsidiary called Pathfinder Resources in order to invest in the Marcellus/Utica region (see Texas Private Equity Firm Forms to Invest in Marcellus/Utica). According to the initial announcement, Pathfinder will focus on acquiring “producing and non-producing oil and gas mineral interests, royalty interests and non-operated working interested” across the U.S., but with a keen interest in the Marcellus/Utica. The company has not wasted any time. According to the Pittsburgh Business Times, Pathfinder Resources has just closed its first deal in our region…
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    OH Congressman Intros Impact Fee for Counties with WNF Drilling

    Congressman Bill Johnson

    Congressman Bill Johnson, Republican from Ohio’s 6th District, has introduced a bill to compensate counties that contain federal lands, if those lands are drilled for oil and gas. Johnson’s bill, titled Providing Opportunities With Energy Revenues (or POWER) Counties Act (copy below), would siphon off a portion of any royalties paid to the federal government for federal lands that are drilled, sending that money back to the counties where the drilling takes place. Although Johnson and those supporting the bill don’t call it an impact fee, that’s exactly what it is. In Pennsylvania instead of a severance tax, legislators passed Act 13 (in 2012) which contains and impact fee. With PA’s impact fee (roughly the same thing as a severance tax), 60% of the fee raised stays with local counties and municipalities, while 40% goes to the black hole of Harrisburg where it disappears into statewide spending (mainly Philadelphia). It has been a hugely successful model–better than a severance tax. Johnson’s proposed law is not a tax, but reallocates money from existing royalties paid to the federal government for drilling on federal lands. In Ohio, the only federal land where drilling takes place is Wayne National Forest–so those counties where there is WNF drilling would get some extra cash to help out with road repairs, first responders, etc. The brilliance of the plan is that it doesn’t impose any new taxes–it simply reallocates who gets what from the existing revenue stream. Johnson says, “it is a simple issue of fairness”…
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    SWPA House Republican to Introduce PA ‘Clean Power Plan’

    PA Rep. John Maher

    That wily Pennsylvania House Rep. John Maher (Allegheny & Washington Counties) is doing it again. Maher, a Republican, is the guy who came up with the brilliant plan to rename PA’s impact fee to a “severance tax”–because the impact fee is the rough equivalent of a severance tax (see PA House Ctte Votes to Rename “Impact Fee” to “Severance Tax”). The measure, which did not make it to the House floor for a vote, was intended to point out that the Marcellus industry in PA is already taxed–just as much (or more) than if it were called a severance tax. Maher is doing it again. Jumping on the (very good) news that President Trump is dismantling Obama’s odious Clean Power Plan (CPP)–a plan that favors so-called renewables over coal and natural gas for power generation–Maher is proposing a Pennsylvania Clean Power Plan. There are no details as yet. Maher has sent out a memo (copy below) to his fellow lawmakers asking them to join him in sponsoring such a plan–details and a meeting to come later. At first blush you might think Maher has defected to the dark side, proposing that PA stick it’s collective finger in President Trump’s eye in an act of defiance by adopting its own mini-version of the Obama CPP. We don’t think that’s what is happening at all. We think Maher’s CPP will focus on letting the free market figure out how best to reduce carbon dioxide emissions. We have no doubt natural gas will play a starring role in Maher’s version of a CPP…
    Read More “SWPA House Republican to Introduce PA ‘Clean Power Plan’”

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    FERC Grants Atlantic Bridge Pipe OK to Begin NY Construction

    The Federal Energy Regulatory Commission (FERC) last week granted permission to Algonquin Gas Transmission (i.e. Spectra Energy, now owned by Enbridge) to build new pipeline infrastructure in New York State, part of the $452 million Atlantic Bridge expansion project. Atlantic bridge was approved by FERC back in January (see FERC Approves Atlantic Bridge Project for New England/Canada). The project beefs up capacity along the Algonquin Pipeline, along with Spectra Energy’s Maritimes & Northeast Pipeline, to carry more Marcellus/Utica gas into New England and (eventually) all the way to Nova Scotia, Canada. Over the shrill objections of antis, including both U.S. Senators from Massachusetts, FERC allowed construction to begin on Atlantic Bridge in Connecticut back in March (see FERC Grants Atlantic Bridge Pipe OK to Begin CT Construction). Miracle of miracles, the corrupt NY Dept. of Environmental Conservation issued water permits for the project in May (see NY DEC Grants Water Permits for Atlantic Bridge Pipeline Project). And now FERC is giving the green light for construction to commence in NY. What work is happening in NY?…
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    Shale Boom Saves U.S. Petchem Industry – Shell Cracker “2nd Wave”

    A decade ago the petrochemical industry in the U.S. was in the toilet–in the midst of a downturn. Plants were leaving our shores, heading to other countries. And then the shale revolution hit full force–and changed everything. Petrochemical plants and investment is now skyrocketing here at home, because of shale. Petrochemicals are chemical products derived from petroleum (i.e. oil) and natural gas. The entire plastics industry comes from oil and gas–you knew that, right? Ethylene (which comes from ethane) and propylene (which comes from propane) are used to make polyethylene and polypropylene respectively–that is, plastics. And plastics are used in just about everything you touch, live in, ride in, etc. Plastics make modern life possible. Without plastics, we’d be back in the Stone Ages–living short, brutish lives. Ten years ago our petrochemical industry was flailing, but today it’s thriving. According to an expert speaking last week at Pittsburgh Chemical Day (an annual event), the Shell ethane cracker now under construction is in the “the second wave” of ethane crackers. According to the same expert, we are witnessing the “biggest buildup in the U.S. petrochemical industry we have ever seen.” And it’s all because of shale…
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    French Bank BNP Paribas Says It Will No Longer Fund Shale Cos.

    We spotted a Reuters story trumpeting word from BNP Paribas–France’s largest bank–that it will no longer “work with oil and natural gas companies that primarily do business in shale or oil sands.” Why? “It plans to boost support for renewable energy projects.” We found that interesting, because BNP Paribas has had a hand in financing a myriad of projects–in the Marcellus/Utica region. Many of the projects they’ve underwritten are in the midstream (pipeline companies), and the downstream (gas-fired electric generating plants). Does the ban on working oil and natural gas companies extend to them? After all, they flow the gas fracked from shale (or oil sands), or burn fracked gas in the case of power plants. Will BNP pull its part of the $400 million credit line from Eureka Midstream (see M-U Pipeline Co. Eureka Midstream Expands Line of Credit to $400M)? Will BNP pull its $460 million worth of loans for the Lawrence County, PA fracked shale gas-fired electric plant (see Ground Broken for Lawrence County, PA NatGas-Fired Electric Plant)? Will BNP pull its backing of hundreds of millions of dollars from two fracked gas-fired OH power plants it’s involved with (see Fluor & Clean Energy Partner to Build 2 OH NatGas Electric Plants). You get our point. This is nothing more than a rankly hypocritical, sleazy, pandering, pusillanimous publicity stunt. Totally meaningless…
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    Climate Terrorists Convicted in ND for Damaging Keystone Pipe

    Finally, some justice against law-breaking eco-terrorists. You may recall in October 2016, eco-terrorists were arrested when they cut padlocks and chains at five remote flow stations (four different states) and shut down five oil pipelines coming from Canada into the United States (see Climate Radicals Turn Terrorist, Shut Down 5 Canada-to-US Oil Pipes). Two of them shut down the Dakota Access Pipeline, part of which was up and running at that time. The two who shut down Dakota Access were convicted by a jury last Friday–found guilty of their crimes. One of them faces 11 years in prison, and the other 21 years. It’s about time! Why do we care what happened to a couple of loser eco-terrorists in North Dakota? Because some of their members promised to target the Marcellus/Utica region next (see Dakota Access Pipeline Protesters Turn Violent; Coming Here Next?). If people are actually held accountable for their criminal actions, maybe they’ll think twice before doing it elsewhere…
    Read More “Climate Terrorists Convicted in ND for Damaging Keystone Pipe”

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    Guest Post: The Real Record of Ex-EPA Sec. Gina McCarthy

    Depending on whether you’re a hardened leftist, or a common sense conservative, Gina McCarthy (former head of the Environmental Protection Agency) was either Savior or Satan. We tend toward the latter–someone who (ab)used her office to push a far-left political agenda. During her tenure, McCarthy oversaw the ramrodding through of the horrible Waters of the United States (WOTUS) and Clean Power Plan (CPP) regulations. It’s taken Team Trump a while, but both measures are being taken apart, plank by plank. Most people from agencies like the EPA retire quietly after their tenure. Not McCarthy. She’s out there in the media attempting to whitewash and cover up her mistakes, and castigating her successor, Scott Pruitt. Mainstream media, which tilts left of Attila the Hun, loves it (and her), giving her a voice. MDN friend Steven Heins, an energy and regulatory consultant and former vice president of communication for Orion Energy Systems, sets the record straight about Ms. McCarthy’s tenure as head of the EPA. Steve reminds us all of some rather uncomfortable truths about the EPA as it was under McCarthy…
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    Sunoco Makes Marcellus Ethane-by-Truck Available at Marcus Hook, PA

    The first truck enters the loading pad for the new ethane distribution rack at Sunoco Partners Marketing and Terminals’ Marcus Hook Industrial Complex in Marcus Hook, Pa., on Sept. 21. The facility’s 300,000 barrel chilled ethane tank is in the background. (Photo Credit: Energy Transfer Partners, L.P.)

    In March 2016 an Ineos tanker ship carrying 173,000 barrels of Marcellus ethane set sail from the Marcus Hook terminal near Philadelphia, bound for Norway (see Bon Voyage! First Ethane Export Ship Leaves Marcus Hook in Philly). Since that time, regular shipments of Marcellus ethane have traveled from Marcus Hook to various European destinations. Yesterday Sunoco Partners, a subsidiary of Energy Transfer Partners and the operator of the Marcus Hook refinery, announced they have opened a new ethane distribution facility inside the Marcus Hook refinery complex. It is a truck loading facility–the first such facility in the U.S. to load liquid ethane onto tanker trucks for local delivery. Wait, what? You thought ethane was only used in gigantic cracker plants, used as the raw material to make ethylene (i.e. plastics)? That is the primary use of ethane–but not the only use. Ethane can also be used as a refrigerant in cryogenic refrigeration systems. And there are other uses for small quantities of ethane, including the manufacturing of electronics. Sunoco says local trucked ethane deliveries will be used for “various ethane uses, from energy research and development to cooling and other industrial applications.” Sunoco already has its first customer–Gas Innovations–a reseller that trucks NGLs like ethane and propane throughout the U.S. (and ships it around the world). Gas Innovations is excited that their “cryogenic ethane business” is now supplied domestically via Marcus Hook. Previously, Gas Innovations had to import liquefied ethane. Marcus Hook’s truck facility opens up a whole new market for smaller users of Marcellus/Utica ethane throughout the U.S….
    Read More “Sunoco Makes Marcellus Ethane-by-Truck Available at Marcus Hook, PA”

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    Transco’s New York Bay Expansion Goes Live, Flows More Gas to NYC

    Williams announced yesterday that its New York Bay Expansion pipeline project to flow an extra 115 million cubic feet per day (MMcf/d) of natural gas to New York City is now online and working. In July 2015, Williams filed an application with the Federal Energy Regulatory Commission (FERC) for the $130 million project, which will flow Marcellus gas to 500,000 additional New York City residents by the 2017/2018 heating season (see Williams Announces New Upgrades to Transco Pipeline into NYC). In July 2016, FERC approved the project and construction began (see FERC Approves Transco Expansion Projects in NYC & Virginia). The project expanded capacity on the Transco pipeline by installing new compressor station equipment, replacing a quarter mile of pipeline (in New Jersey), and upgrading meter and regulator stations at several locations in NJ, PA and NY. All the work was done in existing rights-of-way and at existing facilities, with no new building or greenfield construction necessary. That didn’t stop the crazies from protesting, which they did. The good news is that the project is now completed and more yummy, fracked Marcellus gas is now flowing to customers in Brooklyn, Queens, Staten Island and Long Island…
    Read More “Transco’s New York Bay Expansion Goes Live, Flows More Gas to NYC”

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    NC DEQ Rejects Plan for Atlantic Coast Pipeline – What’s Next?

    North Carolina has become the first state to complete an environmental evaluation for Dominion’s proposed $5 billion, 594-mile Atlantic Coast Pipeline (ACP)–a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. ACP is slated to run through eight NC counties. After completing it’s evaluation, the NC Dept. of Environmental Quality (DEQ) issued a rejection letter (copy below) for the project. The reason? The DEQ says the erosion and sediment control plan for the project is not up to scratch. Dominion can now do two things: Revise the erosion and sediment control plan and resubmit it, or contest the DEQ’s rejection of the existing plan. Although antis are rejoicing at the news, there really isn’t much here in the way of news. This is not uncommon in pipeline reviews. A government agency (federal or state) will push back on some aspect of the plan, the project builder will modify the plan, and the modified plan will pass muster and life goes on. That’s the way it works. The DEQ is (presumably) doing it’s job and not simply looking for an excuse to reject the project. We’ll give them the benefit of the doubt–this time. Although we’ve not read that Dominion has responded to the rejection, another partner in the project, Duke Energy, has responded–saying they will provide the necessary information the DEQ says is missing in the original plan…
    Read More “NC DEQ Rejects Plan for Atlantic Coast Pipeline – What’s Next?”

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    Small Group of Radicals Blocks Atlantic Sunrise Site in Lancaster County

    Environmental radicals from a group called Lancaster Against Pipelines made good on their promise to disrupt work on Williams’ Atlantic Sunrise Pipeline project–a $3 billion, 198-mile natural gas pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. Lancaster Against Pipelines is headed up by Mark Clatterbuck (who participated in the protests against the Dakota Access Pipeline) and his wife Malinda. The clattering Clatterbucks got 20-35 wackos from Lancaster County to load themselves into 16-18 vehicles (numbers change depending on the news source), which they then drove onto an access road used by Williams, where workers are beginning to clear land. The wackos parked themselves right in the middle of the road and stood in front of machinery, preventing Williams personnel from accessing the site. The only problem, for the wackos, is that it was raining so hard (leftovers from Hurricane Nate moving through), that Williams personnel weren’t working at the site anyway! However, it’s the principle of the thing. So the police were called. The so-called protesters were asked to move (or be arrested)–so they moved. End of story. Nobody hauled away in handcuffs, no striking images of people laying down refusing to move (too wet for that). Just a bunch of wackos with nothing better to do for a few hours, along with a few reporters…
    Read More “Small Group of Radicals Blocks Atlantic Sunrise Site in Lancaster County”

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    OH Supreme Court Blocks Youngstown Frack Ban Ballot Measure

    In July MDN told you that puppets of the PA-based Community Environmental Legal Defense Fund (CELDF) have once again gotten enough signatures to put a so-called Community Bill of Rights (i.e. frack ban) ballot measure on the ballot this November in Youngstown, Ohio for a 7th time (see Youngstown Frack Ban Vote on November Ballot – for 7th Time). The same people have tried six times before–and the ballot measure failed every single time. However, as we pointed out, this time is different. In addition to the usual no fracking, no pipelines pablum, this 7th petition has language that makes it legal to break the law. If the ballot measure were to pass, and if an anti got it into her head to sit in front of a bulldozer that was about to clear ground for a wellpad, or dig a trench for a pipeline, the police would not be able to arrest and remove the anti. It would be within her rights to sit there and block legal, legitimate activity–all in the name of saving the planet. It would, in essence, legalize mob rule. In September the Mahoning County Board of Elections voted to NOT allow measure on the ballot in November (see Mahoning County Bans Frack Ban Measure from Nov Ballot in Youngstown). Using the deep pockets of the CELDF, antis appealed the rejection to the Ohio Supreme Court. It didn’t take the Supremes long. They ruled last Friday to uphold the Mahoning County Board of Elections decision to not allow the measure on the November ballot. However, it was a close vote, 4-3, and likely means more litigation will follow in the future…
    Read More “OH Supreme Court Blocks Youngstown Frack Ban Ballot Measure”

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    Another Look at WV’s Co-tenancy & Joint Development Proposals

    When MDN editor Jim Willis attended the Shale Insight conference in Pittsburgh two weeks ago, one of the recurring themes he heard from West Virginia officials is that the state urgently needs to pass “mineral efficiency” laws. What they meant by mineral efficiency is another name for co-tenancy and joint development. We’ve written a fair bit about the topic–what we call “forced pooling lite.” In August the West Virginia Oil & Natural Gas Association (WVONGA) announced its intention to push, once again, for co-tenancy and joint development (see WVONGA Makes Plans to Push Forced Pooling Lite in 2018). We spotted an editorial from the co-founder of the West Virginia Surface Owners Rights Organization on the topic co-tenancy and joint development. He has a unique perspective. He calls co-tenancy “majority rules” and joint development “invisible ink.” What does he mean? And what would these two measures do if adopted? And is there really an urgent need for them? Let’s tackle this issue once again…
    Read More “Another Look at WV’s Co-tenancy & Joint Development Proposals”

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    Is Marcellus/Utica Gas Getting Exported from Cheniere’s Sabine Pass?

    One of the reasons we periodically report, and keep a close eye on, Cheniere Energy’s Sabine Pass LNG export facility in southern Louisiana is our suspicion that at least some Marcellus/Utica gas makes its way to that facility and gets exported to other countries. We’ve never been able to prove our suspicion, but we got a lot closer to proving last February when Williams confirmed that the mighty Transco Pipeline now has a direct connection to Sabine Pass (see Williams Confirms Transco Now Ships Gas Directly to Cheniere LNG). Our friends at RBN Energy have done a deep dive into this topic. Using flow data and their own knowledge of pipelines and reports about new projects coming online, RBN has determined that “there are early indications that recent pipeline takeaway and reversal projects from the producing region and the resulting connectivity are indirectly bridging the divide.” Meaning that by using indirect routes (gas passed from one pipeline to another to another), indeed some of our gas is making its way to the Sabine Pass export facility…
    Read More “Is Marcellus/Utica Gas Getting Exported from Cheniere’s Sabine Pass?”

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    Important Marcellus/Utica Primer Available to Download – for FREE

    MDN editor Jim Willis has once again partnered with NGI (Natural Gas Intelligence) to bring you a great (and FREE) opportunity to learn more about everyone’s favorite twin shale plays: The Marcellus and Utica Shales. NGI produces a mountain of data and information as part of their research and development efforts, publishing it in a Shale Plays Factbook, which costs $179. However, because of MDN’s special partnership with NGI, they have agreed to combine the Marcellus/Utica sections from the Factbook into a special primer, available free for MDN readers only. Here’s what’s in the Marcellus/Utica Shale Primer, a few sample pages, and how you can get a copy instantly…
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