Industrywide Issues

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    PA State Sen. Intros Meaningless Resolution Urging Natgas Exports

    In our daily trawl of the news, we came across the text of a resolution by Pennsylvania State Senator Stewart J. Greenleaf. Sen. Greenleaf is looking for co-sponsors of the resolution, which urges PA natural gas producers to export natural gas to European countries in order to curtail a Russian natgas monopoly. Greenleaf said, “Copies of this resolution will be transmitted to the Marcellus Shale Coalition, the Secretary of the Pennsylvania Department of Community and Economic Development, the President of the United States, the presiding officers of each house of Congress and to each member of Congress from Pennsylvania.” We thought: Nice sentiment…raise the natgas flag…rah rah and all that jazz. But at the end of the day, a resolution is meaningless. It has no force of law. It does nothing. It’s purely public relations bupkis. We wondered, why would Sen. Greenleaf, from Montgomery County (near Philadelphia) introduce this now? We revisited the list of traitorous Republican Senators who voted for the state budget that includes a severance tax (see Traitorous PA Senate Republicans Pass Severance Tax Bill). And yes, we discovered Sen. Greenleaf is one of the traitorous Republicans who voted for the horrible severance tax (and horrible gross receipts tax on natural gas, phones and electricity). The light went on. Greenleaf is using this resolution as a sleazy political ploy to try and curry favor with the natural gas industry–after he stabbed it in the back…
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    Dear FERC: Please Approve AC Pipeline in Sept; Love, Dominion+Duke

    Dominion Energy and Duke Energy hopes lightening will strike twice. In August, DTE Energy and Spectra Energy (now part of Enbridge), sent a letter to the new FERC quorum urging fast action to approve NEXUS Pipeline, a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada (see NEXUS Pipeline to FERC: Please Approve Project – NOW). A few weeks later, FERC approved it (see New FERC Quorum Votes Final Approval for NEXUS Pipeline). Dominion Energy and Duke Energy, joint owners of the $5 billion, 594-mile Atlantic Coast Pipeline–a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina–yesterday sent a similar letter to FERC, requesting speedy action to approve their project. Hey, if it worked for NEXUS…
    Read More “Dear FERC: Please Approve AC Pipeline in Sept; Love, Dominion+Duke”

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    Yale U Launches Another Sham Fracking Study, Predetermined Outcome

    In June 2016 MDN told you about a sham “study” on the way from an anti-drilling “researcher” from Yale University, funded by Big Green groups (see Yale Arrives in Belmont County to Study the Evils of Fracking). “Researcher” Nicole Deziel arrived in Belmont County and announced, in so many words, she would drag a $20 bill through a trailer park (literally willing to pay only $20) to “study” air and water samples from residents’ domiciles as part of a new research “project” with a predetermined outcome–that they’re being poisoned by fracking. Ms. Deziel wanted 100 participants and ended up with 66. After eight weeks of collecting samples and talking to people, Ms. Deziel held a wrap-up rally with area residents before departing town to discuss the “study”–saying she has no conclusions, yet. The reason we knew the Yale “study” is a put-up job, and not real science, is because at the very same wrap-up meeting residents also heard from the radical anti-drilling group Ohio Environmental Council. That was the tip-off that this was not real research but hucksterism with a predetermined outcome (see Put-Up Job: Yale “Researchers” Meet with Locals in Belmont County). Ms. Deziel and a cabal of Yale “researchers” are back to “launch a new study on the health effects of hydraulic fracturing.” This time Deziel and company have hit big money–the “study” is being funded with $2 million grant from the Environmental Protection Agency. Antis doing “research” have fleeced the EPA into backing them for another study with a predetermined outcome. A true waste of taxpayer’s money. But hey, it’s made millionaires out the researchers!…
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    Rover Pipeline Triples Volume of Gas Flowing, Prices Go Up

    Phase 1A of the Rover Pipeline has been online for less than a week (see Big Portion of Rover Pipeline Now Up & Running – Thru Most of Ohio). As we reported on Sept. 1st, Energy Transfer planned to initially flow around 211 million cubic feet per day (MMcf/d) of Utica/Marcellus natural gas. However, according to flow data from Genscape (as reported by Natural Gas Intelligence), within a few days the pipeline ramped up and began flowing over 600 MMcf/d–triple the initial volume. The result? The commodity price at the Dominion South trading point popped. Last Friday natural gas at Dominion South was selling for an average of $1.05 per million BTUs (MMBtu). On Tuesday, the price averaged $1.38/MMBtu–a 31% increase. Behold the power of a single, partially completed pipeline!…
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    US Methanol Breaks Ground on First Plant in West Virginia

    US Methanol broke ground yesterday in Institute (Kanawha County), WV for its very first methanol production plant. In August 2016 MDN was the first to share the news that US Methanol is building at least two, rumored up to five, methanol plants in the Mountain State (see Rumor: US Methanol Building 5 Methanol Plants in WV). MDN shared a rumor (based on a reliable source) that until we disclosed it, was not public knowledge: The first methanol plant US Methanol plans to build will be in Institute, WV, and the second in Belle, WV–both in the Charleston region. Methanol plants convert natural gas into methanol, used as a chemical feedstock (or raw material) to create other things, like gasoline, antifreeze, plastic bottles–even LED and LCD screens. A number of dignitaries attended the groundbreaking in Institute, including colorful WV Governor Jim Justice. A really cool factoid: the plant will be constructed from a deconstructed methanol plant from Brazil. Usually it’s the other way around, plants get shipped from the U.S. to other countries. This time a plant is coming “home” to the U.S. The new plant, called Liberty One, will open in mid-2018–supplied with plenty of cheap and abundant Marcellus/Utica shale gas…
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    PA DEP Says 3 ME2 Spills Violate Agreement with Big Green

    It looks like Big Green has succeeded in conflating a mole hill into a mountain in Pennsylvania. In early August, Sunoco Logistics struck a deal with with several Big Green groups to provide stricter regulation for Mariner East 2 Pipeline’s underground drilling (see Sunoco Strikes Deal with Devil, “Settles” with Anti Groups re ME2). Part of the deal says if Sunoco experiences two leaks of drilling mud at the same location, they must shut down drilling in that location and wait for the state Dept. of Environmental Protection to further review drilling plans before they can restart. On August 24th there was a 50-gallon drilling mud spill into the Susquehanna River in Dauphin County related to ME2. A quick reminder: drilling mud, or “bentonite,” is non-toxic–the same stuff found in toothpaste and kitty litter. The 50-gallon spill would be like spilling 50 one-gallon jugs (maybe 10 bags) of kitty litter into the enormous Susquehanna River–a non-event. However, the Philadelphia-based Clean Air Council cried foul over the spill (see Big Green Group Makes Big Deal Out of Tiny ME2 Mud Spill). And now the state Dept. of Environmental Protection (DEP) has agreed, saying that spill plus spills in two other locations violate Sunoco’s agreement with Big Green…
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    Philly Antis Step Over the Line (Literally) at ME2 Pipeline Site

    Acting like 5-year olds who have been told not to do something, but defiantly do it anyway, several homeowners in a housing development in Delaware County who were specifically instructed not to interfere with clearing work for the Mariner East 2 Pipeline in a Philadelphia suburb. The homeowners intentionally crossed a clearly-marked line into the construction zone, putting themselves at risk. The homeowners, who object to the pipeline, wanted to “push the buttons” of the workers at the construction site. The workers promptly called the cops and of course, work could not commence while the police interviewed everyone to see what’s what. In the end, no arrests were made. The homeowners were on jointly-owned housing development property. Their lawyer told them they could enter the work area as long as they didn’t stop the work being done. One of the babies homeowners admitted she wanted to chain herself to a tree, but she restrained herself. So big of her…
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    Locals and Pipeline Workers Break Bread in Hocking County, OH

    Here’s a story you won’t read in mainstream news outlets–because it doesn’t fit the media’s anti-fossil fuel narrative that all pipelines are evil, and the people installing them are either misguided, or perhaps evil too. TransCanada’s Leach XPress pipeline project involves construction of approximately 160 miles of new “greenfield” natural gas pipeline and compression facilities in southeastern Ohio and West Virginia’s northern panhandle, flowing 1.5 billion cubic feet (Bcf) of gas all the way to Leach, Kentucky (hence the name). The Federal Energy Regulatory Commission (FERC) approved Leach XPress and a companion project, Rayne XPress, in January of this year (see FERC Approves $1.8B Leach & Rayne XPress Pipeline Projects). Construction began in March. One of the locations where the pipeline is actively under construction is Hocking County, in southeast Ohio. A local resident reached out to the pipeline crew working in the area, inviting them to church. Two of the crew members took him up on his offer. After that, the crew foreman invited the entire church to a pizza party with the workers–and they came. Some of the church members brought along homemade soup to share with the workers–and new friendships were forged as they got to know each other over a share meal. Hispanic, African Americans, Caucasians–all together, all having a great time. No talk about the evils of pipelines. Adults behaving like adults. What a breath of fresh air! It all started by inviting the local crew to church…
    Read More “Locals and Pipeline Workers Break Bread in Hocking County, OH”

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    2nd Approval for Virtual Pipeline in Broome County Not Assured

    As we reported last week, a Broome County, NY judge ruled yesterday that the Town of Fenton (Binghamton area) Planning Board did not take a hard enough look at environmental and traffic issues related to their approval of NG Advantage’s plan to construct a facility in the town to compress and load natural gas onto tractor trailers for delivery to regional customers who desperately need the gas–what is called a “virtual pipeline” (see Judge Rules Against Broome Virtual Pipe, NG Advantage to Try Again). The judge’s ruling delays the project for months at least. NG must now resubmit the project for approval by the Fenton Planning Board. Before doing that, NG must first conduct a full environmental impact study and an aquifer study. Even with environmental studies, don’t expect the locals, who appear to have very closed minds, to accept the outcome. That much was clear at a Fenton Planning Board meeting last night. Residents packed the small meeting room to voice their displeasure with the project. Until now the project has enjoyed overwhelming support by the Planning Board and Town of Fenton officials. However, that may be changing. Town of Fenton Supervisor Dave Hamlin said there is “no certainty” that NG’s new, second application will get approved by the Fenton Planning Board…
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    FirstEnergy Knocks $100M Off Sale Price of 4 PA Gas Power Plants

    FirstEnergy, based in Akron, OH, is one of the nation’s largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. FirstEnergy owns a variety of regulated and non-regulated power generation plants. Last November the company announced it wants to sell five power generating plants, four of them natural gas-fired plants in Pennsylvania, plus a hydroelectric plant in Virginia (see FirstEnergy Selling 4 NatGas-Fired Electric Plants in PA). The plants being sold are non-regulated–part of FirstEnergy’s strategy to become a 100% “regulated” utility in the next 12 months. Last December FirstEnergy announced they had found a buyer, LS Power Equity Partners, willing to pay $885 million (later revised to $925 million) for the whole package (see FirstEnergy Finds Buyer for 4 PA NatGas-Fired Power Plants). However, negotiating the finer points of the deal has been “a challenge” and now FirstEnergy says in order to complete the deal, they’re willing to lower the price to $825 million…
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    DOE Electric Grid Report: Shale Killed Coal, Go Easy on Renewables

    Two weeks ago the U.S. Dept. of Energy released a 187-page study called “Electricity Markets and Reliability” (full copy below). Often referred to as “the grid study,” it is the result of a directive in April by the then-new Secretary of DOE, Rick Perry, to develop a report including an assessment of the reliability and resilience of the electric grid and an overview of the evolution of electricity markets. Perry called it “long overdue.” Radical environmentalists predicted the study would take aim at so-called renewable sources of energy and promote more coal use. What did the study actually find? (1) The shale gas revolution had a bigger impact on the decline of coal than did the federal government propping up renewables. (2) The electric grid is in pretty good shape, even though it flows a lot more electricity than it did eight years ago. (3) Lawmakers should not be too eager to force the use of more solar and wind as sources of electricity–not if you want a reliable grid that doesn’t crash when the wind doesn’t blow and the sun doesn’t shine. Natural gas plays a big part in the report…
    Read More “DOE Electric Grid Report: Shale Killed Coal, Go Easy on Renewables”

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    PA House Introduces Balanced Budget with NO Severance Tax

    The Republicans in the Pennsylvania House of Representatives have done the hard work that PA Senate Republicans failed (or refused) to do: they have just introduced a budget bill that doesn’t raise a single tax, including no horrible severance tax–and yet they will balance a wildly overspent budget. How will they accomplish this feat of Houdini magic? By tapping into the bloated extra money budgeted but not spent by numerous state agencies. For example: mass transit, ports, rails and infrastructure accounts have a cumulative extra $507 million sitting in bank, unused. Why not reallocate it? Hazardous waste and industrial cleanups, agriculture, environmental, conservation and recycling programs have an extra $440.5 million laying around. Why not reallocate it? Etc. House Republicans, unlike their traitorous Senate counterparts, have “found” $2.4 billion in money laying around, unused in other accounts, that they plan to reallocate to the state budget. Genius! This is why House Speaker Mike Turzai should be PA’s next governor, not the inept Tom Wolf…
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    CONSOL Hits a Few Snags, Lowers Production Estimates for 2017

    As part of a general announcement issued yesterday, CONSOL Energy provided an update on their best guesstimate (called “guidance” in the business) of how much natural gas production the company will achieve in 2017. The latest guidance reveals that production will be LOWER than previously thought. Earlier in the year CONSOL said they should see on the order of 420-440 billion cubic feet equivalent (Bcfe) of natural gas production this year. The number will be more like 405-415 Bcfe. Why the drop? Ceramic beads. When completing a well, a driller fracks the well with small charges, creating cracks (fractures) in the rock. Into those cracks the driller flows water with sand–or alternatively ceramic beads instead of sand. When the water washes out (or gets absorbed into the rock), the sand or ceramic beads stay in place, keeping the rock propped open so gas and oil can escape out into the well. That’s why sand and ceramic beads are called “proppant.” CONSOL, at least for some of its wells, uses ceramic beads. And according to yesterday’s announcement, completion designs using the beads is taking longer than they thought, slowing down progress on completing and bringing wells online. Hence the lower overall output for this year…
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    Patterson-UTI Buying Directional Driller MS Energy for ~$222M

    Patterson-UTI Energy, an oilfield services company with major operations in the northeast, has just cut a deal to buy out a second company in a deal worth roughly $220 million. The company getting bought is MS Energy Services, a leading provider of directional drilling services in most U.S. shale plays, including a big presence in both the Marcellus and Utica Shale. It was only April of this year that Patterson completed a buyout of Seventy Seven Energy (SSE) in an all-stock deal worth $1.76 billion (see Patterson-UTI Energy Completes Merger with Seventy Seven Energy). SSE is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it. Since then, Patterson has absorbed and put to work SSE’s large drilling rig fleet. MS Energy is a much smaller competitor–with a specialization in directional drilling. The MS deal is similar to the SSE deal in that most of it is a stock swap. Patterson is giving MS Energy 8.8 million shares of stock worth (at yesterday’s opening value of $16.65 per share), $146.5 million. The deal also calls for an additional $75 million in cash. Add it together, and you get roughly $221.5 million. MS Energy’s CEO and COO are both getting jobs at Patterson as part of the deal. Here’s the lowdown on Patterson’s latest acquisition…
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    PA DEP Report on Emissions Exposes Wolf’s Methane Plan as a Dud

    In January 2016 Pennsylvania Gov. Tom Wolf and his now-fired Secretary of the Dept. of Environmental Protection (DEP), John Quigley, introduced an awful four-point plan to supposedly reduce methane emissions by 40% over the next five years (see PA Gov. Wolf’s Plan to Kill Drilling via Methane Emissions Regs). Even though the plan has not (so far) been implemented, due to the negative effects it would have on the drilling industry, the happy news is that air emissions have improved, dramatically, as a recent PA DEP annual report chronicled (see PA DEP Reports: Air Emissions from Shale Industry Improved in 2015). Although methane emissions went up a tiny bit because there’s more drilling and more pipelines than ever, the big news is that methane emissions per unit of production actually went DOWN. But you won’t read that in mainstream news where they trumpet a so-called increase in methane as an excuse to implement Wolf’s dud plan…
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    NEXUS Pipeline Tax Bonanza: $33M in Tax Rev for Single OH County

    Columbiana County, OH

    How often have you read that pipelines are “private companies” and solely created for “corporate greed”–not benefiting landowners all that much, and certainly not benefiting the communities through which they pass. All take, no give. We read those kinds of nonsense statements in so-called mainstream media all the time. False allegations. Fake news. Here’s some real news: One pipeline–the planned NEXUS Pipeline, a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada–will generate ~$33 million in tax revenue over five years for a single county along its route–Columbiana County, OH. That’s tax money going to a local school district, multiple townships and other local government entities. How’s that for “this pipeline doesn’t benefit anyone but the company that owns it”? This story rips the facade off anti arguments that pipelines don’t benefit anyone but corporate greedsters…
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