Dominion 3Q17: Cove Point LNG Coming Online, ACP Permits in Dec
Yesterday midstream and utility giant Dominion Energy issued their third quarter 2017 update. During an analyst phone call, Dominion CEO Thomas Farrell shared some great news regarding both the Cove Point LNG export facility and Atlantic Coast Pipeline (ACP). Farrell said Cove Point will “begin generating LNG” in November, “conclude commissioning” in December and be fully operational by the end of this year. Fantastic! In response to a question by an analyst about Atlantic Coast Pipeline, Farrell said he expects water permits from West Virginia, North Carolina and Virginia will all be issued by the middle of December. Again, fantastic! These two projects are HUGE with respect to the future of the Marcellus/Utica region. Christmas has come early this year. 🙂 Below is yesterday’s 3Q17 update for Dominion, along with the latest slide deck and select comments pulled from the analyst phone call…
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An extensive article in the Pittsburgh Business Times calls attention to the developing shortage of qualified construction workers in southwest Pennsylvania. So far the need for workers has been met, but it’s not hard to predict that as Shell ramps up its “vertical construction” (building the buildings to house the cracker) this fall, that shortages will happen–not only for Shell’s project, but for other expansion projects in the area as well. Shell is the anchor. There are dozens (perhaps hundreds) of other businesses that will launch, relocate or expand to take advantage of Shell’s forthcoming supply of cheap plastics. All of those projects will create thousands of jobs in the construction industry. Various colleges and unions have launched training programs to meet the need for electricians, carpenters, iron workers, steamfitters, insulators and sheet metal workers. Question is, will it be enough?…
Natural gas production in 2017 has taken off like a rocket ship. We began the year producing 71 billion cubic feet per day (Bcf/d) of natgas in the Lower 48 states. Today? We’re producing almost 76 Bcf/d! While there are several factors in why there is so much new production this year, there is clearly one main factor: the Marcellus/Utica. The ace analysts at RBN Energy have just posted an insightful look into where and how this extra gas is being produced–by using pipeline flow data. RBN concludes there is about 2 Bcf/d of extra gas in the northeast–over and above demand for the gas. That extra gas either has to find a storage facility, or find a way to a new market. Thing is, we’re not done growing production here in Appalachia. Below is an in-depth look at Marcellus/Utica natural gas production, production that’s breaking records…
Last week an exclusive (invitation-only) event was held in Hershey, PA. It was the second annual Executive Energy Seminar: Regional Energy Markets 10 Years After Marcellus Shale event. This year’s theme (or the name for this year’s event), was “Decade of Disruption: Marcellus Shale and Regional Energy Markets.” The event was organized by John Hanger, a former Pennsylvania state utility regulator and former Secretary of the PA Dept. of Environmental Protection under Ed “Fast Eddie” Rendell. Hanger also previously served as Secretary of Policy and Planning under current Gov. Tom Wolf. Hanger assembled an impressive group, including FERC Commissioner Rob Powelson, FERC Chairwoman Gladys Brown, current Secretary of PA DEP Pat McDonnell, and PJM Interconnection president Andrew Ott (among many others). RTO Insider scored an invite and reported on what was said. Below we have a few select portions of their coverage, of interest to the MDN audience…
In September, members of the New Jersey Pinelands Commission voted to approve a $130 million, 28-mile natural gas pipeline proposed by New Jersey Natural Gas (NJNG) to connect NJNG’s distribution system serving customers in Ocean, Burlington and Monmouth counties (in NJ) and the interstate pipeline system adjacent to the New Jersey Turnpike (see 
On Monday, experts said that closing the Indian Point nuclear plant on the Hudson River in New York will cause a loss of power to the local electric grid feeding New York City. However, they also said natural gas electric generation will fill the void left by the old and uneconomic nuke plant. That is, Marcellus Shale gas will save the day–yaaah! Entergy, the plant owner, is not all that thrilled that natural gas has won this round. An Entergy spokesman at the event could barely conceal his venom, warning gas is an “intermittent facility” with “consequences.” Oooooo. We’re scared. Of course it was nothing more than sour grapes that nukes can’t compete without massive increases for ratepayers to pay the owners of the nuke plants. We live in the U.S., not the U.S.S.R. We have free enterprise, capitalism, freedom and liberty–not a command-and-control economy. Entergy wasn’t the only one spouting nightmare scenarios when (not if) natural gas takes over. Antis don’t want low carbon, low cost natural gas either–because it’s an evil fossil fuel. Antis are looking for a solution, any solution, other than gas-fired power generation, to fill the void that will be left by Indian Point when it closes. Antis have even gotten behind a plan to dig up 333 miles of precious Mom Earth to lay a power cable from Canada through NY. To which we ask: What’s the difference in digging up the ground to lay a power cable or digging up the ground to lay a gas pipeline? Answer: None. Which points out antis’ rank hypocrisy on the issue of pipelines…
Sunoco Logistics has been slapped down in a ruling by the Pennsylvania Public Utility Service (PUC) with respect to a valve station, part of the Mariner East 2 (ME2) pipeline project. In March, MDN told you about an attempt by liberal anti-pipeliners in West Goshen (Chester County) to block the ME2 project (see 
For some reason Tom Wolf has successfully cultivated a public persona of a genteel, non-partisan businessman–from the very beginning of his race for the governor’s chair even through today. We weren’t fooled, but many were. He’s proven to be just what we thought he was: a vicious partisan liberal, a spoiled rich kid who grew up to be a spoiled rich adult. Someone who throws a fit when he doesn’t get his own way. The severance tax is a perfect example. From his first day in office, Wolf lobbied hard for a severance tax. Such a tax was thought to be an easy way to pour billions of dollars into “education.” It was Wolf’s quid pro quo with Philadelphia teacher’s unions. They voted him into office, and he would repay them with big money–getting it from an “easy mark”–the Marcellus industry. Turns out the industry wasn’t such an easy mark after all. It has been a long, bloody fight, but the fight (for this year) is now over and Wolf has lost, third year in a row, to get a severance tax passed. His anger bubbled over last week and Wolf revealed his true character. When asked about the budget process, Wolf’s office issued this statement about House Republicans, attributed to Wolf: their opposition to a severance tax “has revealed the worst of Harrisburg.” In other words, Wolf just called House Republicans, his principled opponents, “the worst of Harrisburg.” His comment is the political equivalent of a five year-old stomping his feet and throwing himself on the floor when he doesn’t get his own way. Thank God for House Republicans who held the line against this insane severance tax, and shame on Senate Republicans who turned traitor. Hopefully they’ve learned a lesson from their courageous House colleagues about holding the line…
Last week the University of Pennsylvania published “Pennsylvania’s Gas Decade,” a study looking at the impact of the Marcellus Shale on the state’s utility customers over a ten-year period, from 2007-2016 (full copy below). The study shows that on average, PA customers now pay 40% less for natural gas than they did ten years ago. The study also shows electricity customers are paying less–thanks to the Marcellus. Before Marcellus drilling began, PA produced 1% of the nation’s natural gas supplies. Today? PA produces 16% of our country’s natgas supplies. Thank you Marcellus! The study’s author predicts the trend toward lower natgas prices for PA residents will reverse–eventually. Why? The Federal Energy Regulatory Commission has approved a staggering 53 interstate pipeline projects that cross PA (more than twice that of any other state). Once/if those projects are built, more gas will flow out of the state, meaning prices for gas will rise. Hey, drillers aren’t sticking around in PA just to break even or lose money. They are in the state to make money, and part of making money is getting the gas to other markets. In the meantime, before the plethora of pipelines are built, PA residents should enjoy the low prices they’re paying…
Several weeks ago U.S. Energy Secretary Rick Perry sent a letter to the Federal Energy Regulatory Commission (FERC) directing the agency to complete action on a “grid resiliency” pricing rule within 60 days. The proposed rule Perry proffered to FERC would put in place regulations that favor electric generating plants powered by coal and nuclear. That is, it would allow unprofitable ventures to pass along new costs, making them profitable–in the name of protecting the electric grid. The theory Perry (and by extension President Trump) subscribe to is that if the free market drives out coal and nuke plants, the electric grid would be “vulnerable” to far fewer sources to power it. If coal and nukes are all but gone, and all of sudden there’s a natural gas shortage, or prices spike for natural gas, it would endanger the electric supply in this country. On one side of the argument are those who believe the free market sometimes needs a helping hand (via regulation), and on the other those who believe the free market will sort it all out and we are not vulnerable. It’s no surprise that the coal and nuclear lobbies are celebrating Perry’s action, and the oil & gas lobby along with electric grid operators, are not (see 
The U.S. District Court in Akron, OH has just made a major ruling that affects all Utica landowners and drillers. In 2015, the Ohio Supreme Court accepted a case that will sound familiar to readers of MDN. The case, known as Lutz v. Chesapeake Appalachia, is about whether or not drillers (Chesapeake in this case) are allowed to deduct certain post-production costs from landowner royalty checks. The Ohio Supremes were asked to decide whether Ohio follows the “at the well” rule, which permits the deduction of post-production costs, or if the state follows the “marketable product” rule, which limits the deduction of post-production costs under certain circumstances. The Supremes came down off Mount Olympus in November 2016 to render their verdict (see 
Yesterday EQT provided an update for both its drilling and midstream operations. On the midstream side, EQT had an interesting comment about it’s biggest project on the books–the Mountain Valley Pipeline (MVP). MVP is a $3.5 billion, 303-mile natural gas pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The Federal Energy Regulatory Commission (FERC) issued a final approval for the project two weeks ago (see 
Mountaineer NGL Storage wants to build a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see 
Yesterday MDN brought you the exciting news that Marcellus shale gas molecules have been/are finding their way all the way to Nova Scotia, Canada (see 
This is the perfect illustration of how parts of state government, like the so-called Environmental Justice division of the Pennsylvania Dept. of Environmental Protection (DEP), get co-opted by Big Green groups. In 2015 then-Secretary of the DEP, John Quigley, “reactivated” the Office of Environmental Justice at the DEP to give poor folks and minorities an important new weapon to oppose shale drilling (see